Deal appears closer as default looms
UNITED STATES
US SENATORS said they were closing in on a deal yesterday that would reopen the government and push back a possible default for several months, though many hurdles remained as a Friday (NZ time) deadline drew near.
The Senate’s top Democrat and top Republican both said they hoped they could soon reach an agreement that would allow them to avert a looming default and end a partial government shutdown that has dragged on for 14 days so far.
‘‘I’m very optimistic that we will reach an agreement that’s reasonable in nature this week,’’ Senate Democratic leader Harry Reid said on the Senate floor.
Lawmakers are racing against the clock, with officials estimating that the federal government could run out of borrowing capacity on Friday.
The plan under discussion would raise the US$16.7 trillion debt ceiling by enough to cover the nation’s borrowing needs at least through till mid-February 2014, according to a source familiar with the negotiations.
It also would fund government operations through the middle of January, keeping in place the across-the-board ‘‘sequester’’ spending cuts that took effect in March, though government agencies would have more latitude to ease their impact. It would also set up a new round of budget talks that would try to strike a bargain by year’s end.
Any deal would also have to win approval in the House of Representatives, where conservative Republicans have insisted that any continued government funding must include measures to undercut President Barack Obama’s signature health law — a nonstarter for Democrats.
The deal would not resolve the disagreements over long-term spending and healthcare that led to the crisis in the first place. It would amount to a clear retreat for Republicans who have sought to tie any continued funding and borrowing authority to measures that would undercut Obama’s Affordable Care Act.
Republicans have taken a hit in opinion polls since the standoff began and some in the party worry it could hurt their chances to win control of the Senate in next year’s midterm elections.
A Washington Post/ABC News poll released yesterday found that 74 per cent of Americans disapprove of the way congressional Republicans have handled the standoff, compared with a 53 per cent disapproval rating for Obama.
Senate Republican leader Mitch McConnell, of Kentucky, echoed Reid’s comments that a deal could come together soon. ‘‘I share his optimism that we’re going to get a result that will be acceptable to both sides,’’ he said.
The White House postponed a planned meeting with congressional leaders in order to give negotiators more time to work out a deal.
The Treasury Department says it cannot guarantee that the government will be able to pay its bills past Friday if Congress does not raise the debt ceiling by then.