Last Minute Senate Deal to Prevent Debt Default Unveiled

October 16, 2013 10:12 AM

Senate Majority Leader Harry Reid (Nev.) and Senate Republican Leader Mitch McConnell (Ky.) today announced a bipartisan group of leaders in the chamber have finalized a deal to reopen the government and raise the debt ceiling, setting the stage for Congress to vote on the measure.

It is expected to pass the Senate without issue, but it will be a tougher sell in the House; the agreement does not include many concessions regarding the Affordable Care Act (ObamaCare) for which House GOP representatives and especially the Tea Party fraction had pushed.

House Speaker John Boehner (R-Ohio) has said he will allow a vote on the deal. The Senate is expected to vote on the measure early this evening, with the House expected to follow later tonight.

The proposal would extend current funding levels $986 billion through Jan. 15 to reopen the government, lift the debt ceiling until Feb. 7 and start a budget conference with instructions that it report a broader budget deal by Dec. 13. This committee would be led by Senate Budget Committee Chair Patty Murray (D-Was.) and House Budget Committee Chairman Paul Ryan (R-Wis.).

The proposal would require stricter efforts to verify the income of those who apply for subsidies under ObamaCare. The measure would also permit the Treasury Department to retain its power to use extraordinary measures when approaching a debt limit and would give agencies more flexibility to deal with automatic across-the-board spending cuts known as sequestration.

The Treasury Department says the U.S. will begin defaulting on its debt tomorrow if a deal is not passed, though private analysts say the actual date is likely closer to month's end.

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