Senator John McCain said the deal marked the 'end of an
agonising odyssey' for Americans.
US Senate leaders announced a deal today to end a
political crisis that partially shut down the federal
government and brought the world's biggest economy close to a
debt default that economists said threatened financial
US stocks surged, nearing an all-time high, on news of the
deal, which must still be approved by vote in the Senate and
the House of Representatives. But trading volumes remained
low, underscoring how the political brinkmanship in
Washington has unnerved Wall Street.
A stand-off between Republicans and the White House over
funding the government and raising its borrowing authority
forced the temporary lay-off of hundreds of thousands of
government workers and created concern that crisis-driven
politics was the "new normal" in Washington.
Senator John McCain, whose fellow Republicans triggered the
crisis with demands that President Barack Obama's signature
"Obamacare" healthcare law be defunded, said the deal marked
the "end of an agonising odyssey" for Americans.
"It is one of the most shameful chapters I have seen in the
years I've spent in the Senate," said McCain, who had
repeatedly warned Republicans not to link their demands for
Obamacare changes to the debt limit or government spending
But even if the Senate and House manage to overcome
procedural hurdles to seal the deal before tomrrow- when the
Treasury says it will exhaust its borrowing authority - it
will only be a temporary solution that sets up the prospect
of another showdown early next year.
The deal that emerged today would extend US borrowing
authority until February 7, although the Treasury Department
would have tools to temporarily extend its borrowing capacity
beyond that date if Congress failed to act early next year.
It would also fund government agencies until Jan. 15.
The deal includes some income verification procedures for
those seeking subsidies under the healthcare law, but
Republicans surrendered on their attempts to include other
changes, including the elimination of a medical device tax
used to help pay for it.
With Republicans in the House of Representatives deeply
divided on the way forward, White House spokesman Jay Carney
said "we are not putting odds on anything" when asked about a
House vote on the Senate plan.
Congressional aides said the House and Senate were expected
to approve the fiscal deal later on Wednesday, clearing the
way for Obama to sign it into law before Thursday's deadline.
While analysts and U.S. officials say the government will
still have roughly $30 billion in cash to pay many
obligations for at least a few days after October 17, the
financial sector may begin to seize up if the deal is not
finalized in both chambers.
The planned votes signal a temporary ceasefire between
Republicans and the White House in their latest
no-holds-barred struggle over spending and deficits that has
at times paralysed both decision-making and basic functions
The political dysfunction has worried US allies and creditors
such as China, the biggest holder of US debt, and raised
questions about the impact on America's prestige.
The US Treasury has said the political impasse risks hurting
the United States' international reputation as a safe haven
and stable financial center.
Senate Majority Leader Harry Reid and Republican leader Mitch
McConnell announced the fiscal agreement on the Senate floor,
where it was expected to win swift approval after a main
Republican critic of the deal, Senator Ted Cruz of Texas,
said he would not use procedural moves to delay a vote.
The deal is seen as a victory for Obama, who held firm and
refused to negotiate on changes to Obamacare, and a loss for
House of Representatives Speaker John Boehner, who again
failed to marshal his unruly Republican caucus, particularly
lawmakers aligned to the conservative, small government Tea
The fight over Obamacare rapidly grew into a brawl over the
debt ceiling, threatening a default that global financial
organizations warned could throw the United States back into
recession and cause a global economic disaster.
"Even though the market is moving up, this is a real historic
event that is happening here so there is pause and concern,"
said Frank Davis, director of sales and trading at LEK
Securities in New York.
"You are seeing a lack of activity because it's hard to
invest in a market where you don't know what's around the