U.S. Senate leaders struck a bipartisan 11th-hour deal to break the fiscal impasse on Wednesday, and the Republican-led House of Representatives agreed to take it up as Congress moved to avert a historic debt default.
With the government's borrowing authority set to run out on Thursday, aides said House Speaker John Boehner would allow the deeply divided House to vote on the Senate plan for a short-term increase in the debt limit and a reopening of government, which was expected to pass with mostly Democratic votes.
The timing of the House and Senate votes is unclear.
The deal would extend U.S. 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.
The agreement also would fund government agencies until January 15, ending a partial government shutdown that began with the new fiscal year on October 1.
The moves were a bruising political defeat for Republican conservatives who had demanded changes to President Barack Obama's healthcare law before they would agree to fund the government.
It was unclear if Boehner's leadership position will be at risk in the political fallout, but opinion polls show Republicans have taken a political beating in the showdown as they head into next year's congressional elections.
“The deal we've got, you know the old saying 'we may have left a little bit on the table?' We left everything on the table,” Republican Senator Lindsey Graham of South Carolina said. “This has been a very bad two weeks for the Republican brand, conservatism.”
Major US Payments Due
Oct. 23 - Social Security benefits $12 billion
Oct. 30 - Medicaid payments to providers $2 billion
Oct. 31 - Interest payment on public debt $6 billion
Nov. 1 - Medicare payment to providers and plans $18 billion
Social Security benefits $25 billion
Military pay, retirement and veteran benefits $12 billion
Supplemental Security income benefits $3 billion
Nov. 14 - Social Security benefits $12 billion
Nov. 15 - Interest payment on debt $29 billion
Asked by reporters if the fight for deficit reduction and changes to the healthcare law was over for now: “That appears to be where we are headed,” said Republican Representative Jim Jordan of Ohio.
It remained to be seen if the House and Senate could pass the deal before Thursday, when the U.S. Treasury has said it will hit a $16.7-trillion borrowing limit. The government will have enough cash on hand to meet its financial obligations for a few more days, but officials have warned that an economically devastating default could quickly follow.
The deal between Senate Majority Leader Harry Reid and Republican leader Mitch McConnell gives Obama what he had demanded for months: a straightforward debt limit hike and government funding bill.
The extension is shorter than the one year Obama had asked for, however, and promises another budget fight in a few months.
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.
“This is not a time for pointing fingers and blame. This is a time for reconciliation,” said Reid on the Senate floor in announcing the deal.
McConnell and Reid said the agreement will give both parties time to try to negotiate a long-range budget agreement, although they acknowledged that has been hard to achieve.
The Senate leaders were exploring ways to speed the legislation through their chamber, which often can get bogged down for days with procedural hurdles.
Republican Tea Party firebrands, such as Senator Ted Cruz of Texas, have tried to delay passage of a government funding bill as they demanded changes to Obama's signature healthcare law in return.
But Cruz said on Wednesday he would not delay passage of the bipartisan deal, although he bitterly criticized it.
“Unfortunately, once again it appears the Washington establishment has refused to listen to the American people,” Cruz told reporters.
The budget deadlock led to federal agency shutdowns as Obama and his fellow Democrats stood firm against changing the healthcare law.
Republican Representative Sean Duffy of Wisconsin said most House conservatives likely would reject the Senate's plan, but “more than likely it'll pass,” he told MSNBC's Morning Joe