Crisis Averted? Senate Reaches Last-Minute Debt Limit Deal

The Capitol is seen in Washington, early Monday, July 8, 2013, as Congress returns to work following the Independence Day recess.
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We have a deal.

Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) shook hands Wednesday on an agreement to avert a debt default — just 12 hours before the debt ceiling deadline — and re-open the shuttered federal government.

House Republican leaders are expected to bring up the bill for a vote.

The government will be funded through Jan. 15 at current spending levels of $986.3 billion, established by the across-the-board cuts known as sequestration.

The debt limit will be raised through Feb. 7, with Treasury permitted to use extraordinary measures to borrow after that date, if necessary. The plan includes a “motion of disapproval” wherein Congress can vote to disapprove of this particular increase within 15 days of the president’s announcement. If the motion gets a majority in both chambers, he can veto it.

A bipartisan House-Senate conference committee will be initiated and tasked with submitting formal budget recommendations by Dec. 13, should it reach an agreement.

Individuals seeking subsidies to buy insurance under Obamacare will be required to prove that their income level makes them eligible for such financial assistance under the law.

Workers furloughed during the government shutdown will receive back pay.

“The compromise we reached will provide our economy with the stability it desperately needs,” Reid said on the floor. “It’s never easy for two sides to reach consensus, it’s really hard, sometimes harder than others. This time was really hard.”

The proposal will not include previously considered proposals to repeal or delay Obamacare’s medical device tax or postpone a reinsurance fee under the law (a delay that labor unions had pushed for) aimed at stabilizing health insurance premiums.

“The relief we hope for is to reopen the government, avoid default and protect the historic cuts we achieved under the Budget Control Act,” McConnell said on the Senate floor. “This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought.”

UPDATE 5:50 pm: The final legislative text has been released and sent to reporters by a Senate Democratic leadership aide. (A second aide cautioned that some “superficial” tweaks may still be made.) Read it below.

The Senate is set to vote Wednesday evening, with the House to follow shortly after.

Senate Debt Limit and CR Deal, 10-16-2013

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