Senate leaders announce deal to end shutdown and avoid default - WRCBtv.com | Chattanooga News, Weather & Sports

Senate leaders announce deal to end shutdown and avoid default

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By Michael O'Brien, Political Reporter, NBC News

On the brink of a national default, the leaders of the Senate struck a deal Wednesday to reopen the federal government and extend its power to borrow money. The House appeared ready to go along — and end, at least for now, the crisis in Washington.

Sen. Harry Reid, the Democratic leader, said on the Senate floor at midday that his party and Republicans had found their way to a compromise to "provide our economy with the stability it desperately needs" and avert financial disaster.

His Republican counterpart, Sen. Mitch McConnell, offered his blessing: "This is far less than many of us had hoped for, frankly, but is far better than what some had sought."

The compromise would fund the federal government through Jan. 15 and extend the borrowing power, known as the debt ceiling, through Feb. 7. It also calls for an agreement by mid-December on a long-term budget plan.

While it raises the specter of further fights to come, the compromise at least puts an end a government shutdown that has dragged on for 16 days, leaving hundreds of thousands of workers without pay and doubtless hurting the delicate U.S. economy.

It also comes one day before the deadline at which the Treasury warned that it would be running dangerously low on money and running the risk of a default on government bond payments — an outcome that economists said would have been catastrophic.

Removing a final obstacle in his chamber, Sen. Ted Cruz, the Texas Republican who carried the banner for conservatives into the government shutdown, said he would not block the deal.

The White House commended the Senate for its leadership, but Jay Carney, the press secretary, was quick to remind reporters of the economic damage already done.

"There are no winners here," he said. "The American people have paid a price for this. And nobody who's sent here to Washington by the American people can call themselves a winner if the American people have paid a price for what's happened."

The stock market, sensing an agreement, rallied Wednesday from the opening bell. The Dow Jones industrial average soared more than 200 points, and other indexes approached all-time highs.

Crucially, bond investors signaled they were less worried, too. Yields on short-term government debt, even loans coming due next week, fell sharply, a sign that investors felt surer that they would get their money back.

Sources told NBC News that the Senate would likely pass the bill first, probably Wednesday evening. The sources said that they expected some Republican senators to vote yes, offering some political cover for Republicans in the House.

Sen. John McCain, R-Ariz., gave a nod to bipartisanship but was in no mood to celebrate.

"I think it's obvious that we are now seeing the end of this agonizing odyssey that this body has been put through, but far more importantly the American people have been put through," he said on the Senate floor. "It's one of the more shameful chapters that I have seen in the years that I have spent here in the Senate."

The timing for a vote in the House was unclear, but House Republicans were expected to meet in the afternoon.

Sources told NBC News earlier in the day that John Boehner, the Republican speaker of the House, would allow a vote on the compromise — suggesting it would pass with overwhelming Democratic support and just enough Republicans to win a majority.

Rep. Nancy Pelosi of California, the House Democratic leader, guaranteed the bill's passage in an interview on the MSNBC program "Andrea Mitchell Reports." She said the vote in the House could come within hours or Thursday morning.

"We're going to pass it," she said. "It's going to pass in the Senate. We're going to pass it in the House. I can't believe that many Republicans will vote against opening government and lifting the debt ceiling, but we'll see."

On Tuesday, momentum toward a deal stalled when Boehner failed to come up with any plan that could satisfy his own Republican membership. Conservatives had demanded significant changes to the health law known as Obamacare.

Throughout the past month's fiscal showdown, Boehner had insisted on advancing legislation with only Republican votes — often forcing him to draft deeply conservative legislation that had no chance of passage in the Democratic-controlled Senate.

The ordeal laid bare many of the dividing lines that have plagued the House Republicans for the past two and a half years, and ceded leverage in the spending fight to the Senate and Democrats who control that chamber.

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