US avoids default, re-opens
By Steven R. Hurst ,APWASHINGTON -- Congress reopened the U.S. government Thursday and signed off on more borrowing so America could pay its bills, quelling a deep political and fiscal crisis. But the deal only pushed the unsolved and bitter ideological battle a few months into the future.
October 18, 2013, 12:05 am TWN
Hundreds of thousands of federal staff began returning to work Thursday after the legislation passed both houses of Congress late Wednesday and was signed into law by President Barack Obama just after midnight. The deal was welcomed around the world, but anxiety persisted about America's long-term stability. The fiscal feud could resume as new deadlines in January and February near, though Republicans might not be so eager for another fight after seeing the party's approval plummet to record lows.
The impasse, fought over government spending in general and Obama's new health care program in particular, had shuttered national parks and monuments, and mostly closed down agencies NASA and the Environmental Protection Agency. Critical functions of government went on as usual, but the closure and potential default weighed on the economy and spooked the financial markets. Standard & Poor's estimated the shutdown has taken US$24 billion out of the economy.
Obama hailed the legislation — which adhered strictly to the terms he laid down when the twin crises erupted more than three weeks ago. “We'll begin reopening our government immediately and we can begin to lift this cloud of uncertainty from our businesses and the American people,” he said.
Republican House of Representatives Speaker John Boehner said: “We fought the good fight. We just didn't win.”
As the deal came together earlier Wednesday, the stock market surged on the prospect of an end to the crisis that had threatened to shake confidence in the U.S. economy both at home and abroad.
IMF managing director Christine Lagarde welcomed the deal but said the shaky American economy needs more stable long-term finances.
“It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner,” Lagarde said in a statement.
The Republican-controlled House of Representatives voted 285-144 in favor of the bill, even though most Republicans voted against it. In the Democrat-controlled Senate, approval was even more lopsided, 81-18.