After weeks of tense political gridlock over raising the debt ceiling and funding the U.S. government to avoid a credit default, the House of Representatives and the Senate on Wednesday approved a last minute deal that expands the government’s borrowing authority and fully re-opens the government which has been closed over the past 16 days.
President Obama signed the bill shortly after midnight and told government employees to make plans to return to work on Thursday and expect to receive back pay.
“We’ll begin reopening our government immediately, and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people” Obama said from the White House briefing room.
After thanking leadership for coming together to get the deal signed, Obama said, “Hopefully, next time, it won’t be in the 11th hour.”
“One of the things that I said throughout this process is we’ve got to get out of the habit of governing by crisis” Obama added.
The agreement passed in the Democrat majority Senate by a margin of 81-18 and 285-144 in the Republican majority House of Representatives.
Every Democrat in the House of Representatives voted in favor of the deal while the majority of Republicans, including Rep. Paul Ryan (R-Wisconsin), rejected it.
The agreement funds the government until January 15th, keeps the current level of sequester level cuts, and raises the debt ceiling until February 7th.
The agreement also includes some income verification measures for those seeking health care subsidies through Obamacare.
A new budget bipartisan budget committee led by Senator Patty Murray (D-Washington) and Rep Paul Ryan (R-Wisconsin) will be required to work out the details of a long-term budget deal due by December 13th that will be an alternative to government sequester cuts and address issues such as taxation and entitlement reform.
The agreement marks the end of a volatile three week period that has focused on U.S. fiscal policy.
Republicans led by Tea Party Senator Ted Cruz (R-Texas) initially refused to negotiate over the re-opening of the U.S. government and the debt ceiling and made a push for having the budget agreement passed accompanied by a set of policy condition,s such as the defunding and delaying of Obamacare.
In recent days, Republicans backed away from those policy demands and agreed to not allow the U.S. fiscal debate to turn into a proxy battle over the 2010 Affordable Care Act or Obamacare.
According to gallup.com, the Republican Party is now viewed favorably by 28% of Americans, down from 38% in September.
This is the lowest favorable rating measured for either party since Gallup began asking this question in 1992.
The S&P estimates that the government shutdown shaved 0.6 percent off of 4th quarter (Q4) GDP or 24 billion.