WASHINGTON – Republican and Democratic leaders of the United States Senate have struck a cross-party deal to end a partial government shutdown and raise the American debt limit.
Their bill must also pass the House, where a small group of Republicans were expected to join Democrats to send the bill to President Barack Obama.
The bill extends the federal borrowing limit until February 7 and funds the government to January 15.
It comes just a day before the deadline to raise the $16.7 trillion (BDS$33.4 trillion) limit.
On the floor of the US Senate, Democratic leader Harry Reid called the legislation “historic”, saying it would provide time for Congress to work toward a long-term budget agreement.
The plan would create a conference committee of Senate and House members tasked with drawing up a longer-term budget deal.
“Our country came to the brink of disaster,” Reid said. “This legislation ends a stand-off that ground the work of Washington to a halt.”
Republican Senate Minority Leader Mitch McConnell, Reid’s negotiating partner, said he was “confident” the government could reopen and avoid default under the proposed bill.
The deal “is far less than many of us hoped for, quite frankly, but far better than what some had fought,” he said.
“Now it’s time for Republicans to unite behind other crucial goals.”
Politicians, bankers and economists warned of global economic consequences unless an agreement to raise the United State’s government’s borrowing limit were reached.
The US Treasury has been using what it has called “extraordinary measures” to pay its bills since the nation reached its current debt limit in May.
Those methods would have been exhausted by tomorrow October 17, US Treasury Secretary Jack Lew had said, leaving the United States unable to meet all of its debt and other fiscal obligations if the limit was not reached.
Hardline conservatives triggered the budget warfare 16 days ago, forcing the first government shutdown in 17 years by demanding that Obama gut his signature health care overhaul plan.
Although both parties have fared badly in opinion polls during the fiscal stand-off, Republicans have taken the brunt of the blame from voters. (BBC)