A deal: Voting to avoid default, open government

WASHINGTON (AP) – Up against one last deadline, Congress raced to
pass legislation Wednesday avoiding a threatened national default and
ending a 16-day partial government shutdown along the strict terms set
by President Barack Obama when the twin crises began.

“We fought the good fight. We just didn't win,”
conceded House Speaker John Boehner as lawmakers lined up to vote on a
bill that fell far short of Republican wishes.

A Senate vote was set first on the legislation,
which would permit the Treasury to borrow normally through Feb. 7 or
perhaps a few weeks longer, and fund the government through Jan. 15.
More than two million federal workers – those who had remained on the
job and those who had been furloughed – would be paid under the

Across the Capitol, members of the House marked time until their turn came to vote.

After weeks of gridlock, the measure had support
from the White House, most if not all Democrats in Congress and many
Republicans fearful of the economic impact of a default. As a result,
there was little or no doubt it would pass both houses and reach the
White House in time for Obama's signature before the administration's
Oct. 17 deadline.

That was the day that Treasury Secretary Jacob Lew
said the Treasury would reach the current $16.7 trillion debt limit, and
could no longer borrow to meet its obligations.

Tea party-aligned lawmakers who triggered the
shutdown that began on Oct. 1 said they would vote against the
legislation. Significantly, though, Texas Sen. Ted Cruz and others
agreed not to use the Senate's cumbersome 18th century rules to slow the
bill's progress.

“The compromise we reached will provide our economy
with the stability it desperately needs,” said Senate Majority Leader
Harry Reid, declaring that the nation “came to the brink of disaster”
before sealing an agreement.

Senate Republican Leader Mitch McConnell, who
negotiated the deal with Reid, emphasized that it preserved a round of
spending cuts negotiated two years ago with Obama and Democrats. As a
result, he said, “government spending (in one major category of
programs) has declined for two years in a row” for the first time since
the Korean War. “And we're not going back on this agreement,” he added.

McConnell made no mention of the polls showing that
the shutdown and flirtation with default have sent Republicans' public
approval plummeting and have left the party badly split nationally as
well as in his home state of Kentucky. He received a prompt reminder,

“When the stakes are highest Mitch McConnell can
always be counted on to sell out conservatives,” said Matt Bevin, who is
challenging the party leader from the right in a 2014 election primary.

More broadly, national tea party groups and their
allies underscored the internal divide. The Club for Growth urged
lawmakers to vote against the congressional measure, and said it would
factor in the organization's decision when it decides which candidates
to support in midterm elections next year.

“There are no significant changes to Obamacare,
nothing on the other major entitlements that are racked with trillions
in unfunded liabilities, and no meaningful spending cuts either. If this
bill passes, Congress will kick the can down the road, yet again,” the
group said.

The U.S. Chamber of Commerce came out in favor of the bill.

Simplicity at the end, there was next to nothing in
the agreement beyond authorization for the Treasury to resume borrowing
and funding for the government to reopen.

House and Senate negotiators are to meet this fall
to see if progress is possible on a broad deficit-reduction compromise
of the type that has proved elusive in the current era of divided

Additionally, Health and Human Services Secretary
Kathleen Sebelius is to be required to produce a report stating that her
agency is capable of verifying the incomes of individuals who apply for
federal subsidies under the health care law known as Obamacare.

Obama had insisted repeatedly he would not pay
“ransom” by yielding to Republican demands for significant changes to
the health care overhaul in exchange for funding the government and
permitting Treasury the borrowing latitude to pay the nation's bills.

Other issues fell by the wayside in a final deal,
including a Republican proposal for the suspension of a medical device
tax in Obamacare and a Democratic call to delay a fee on companies for
everyone who receives health coverage under an employer-sponsored plan.

The gradual withering of Republicans'
Obamacare-related demands defined the arc of the struggle that has
occupied virtually all of Congress' time for the past three weeks.

The shutdown began on Oct. 1 after Cruz and his tea
party allies in the House demanded the defunding of the health care law
as a trade for providing essential government funding.

Obama and Reid refused, then refused again and again as Boehner gradually scaled back Republican demands.

The shutdown initially idled about 800,000 workers,
but that soon fell to about 350,000 after Congress agreed to let
furloughed Pentagon employees return to work. While there was widespread
inconvenience, the mail was delivered, Medicare continued to pay
doctors who treated seniors and there was no interruption in Social
Security benefits.

Still, national parks were closed to the detriment
of tourists and local businesses, government research scientists were
sent home and Food and Drug Administration inspectors worked only

Obama and Boehner both came to the same conclusion –
that they would allow the shutdown to persist for two weeks, until it
became politically possible to reopen government and address the threat
of default at the same time.

As Republican polls sank, Boehner refused to let
the House vote on legislation to reopen the entire government, insisting
on a piecemeal approach that the White House and Reid rejected as

As the Oct. 17 debt-limit deadline approached,
there were warnings from European officials as well as Cabinet members
and bankers in this country that failure to raise the debt limit invited
an economic disaster far worse than the near-meltdown of 2008.

On Tuesday, the Fitch credit rating agency said it was reviewing its AAA rating on U.S. government debt for possible downgrade.

By then, the endgame was underway.

Late last week, Obama met with Boehner and House
Republicans at the White House. The session resulted in brief follow-up
talks in which GOP aides suggested easing the across-the-board spending
cuts in exchange for changes in benefit programs such as making Medicare
more expensive for better-off beneficiaries.

After that faltered, Reid and McConnell announced
over the weekend they were seeking a deal to solve the crises, and
expressed hope they could quickly come to an agreement.

That effort was suspended on Tuesday, a day of
suspense in which Boehner made one last stab at a conservatives'
solution. When his rank and file refused to coalesce around any
proposal, he gave up and McConnell and Reid returned to their labors.


Associated Press writers Donna Cassata, Alan Fram,
Andrew Taylor, Henry C. Jackson, Bradley Klapper, Laurie Kellman, Julie
Pace and Jim Kuhnhenn contributed to this story.

Copyright 2013 The
Associated Press. All rights reserved. This material may not be
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