by Michael Yoakum
Impunity Watch Reporter, North America
WASHINGTON, D.C., United States – A bipartisan compromise proved successful Wednesday when the Democratically-controlled Senate passed a bill to raise the federal debt limit and reopen the federal government. The bill, which passed 81-18, must now pass through the Republican-controlled House, where Republican leaders have reluctantly agreed to see the bill pass.
If the bill passes in the House, it would arrive on President Obama’s desk for signing by Thursday, which is the deadline for the current debt limit. “I will sign it immediately,” the President said, adding “we’ll begin reopening our government immediately.”
The proposed legislation would fund the federal government through January 15 and allow the Treasury Department to increase the debt limit through February 7.
Speaker John Boehner said he would bring the bill to the House floor for a vote but made no indication that he was giving up on the fight to bring down US debt.
“Our drive to stop the train wreck that is the president’s health care law will continue,” Boehner said.
Amid news of the Senate compromise just hours shy of the debt limit deadline, Wall Street saw stock prices soar.
Wall Street experts have taken the political posturing in the past two weeks in stride, never honestly considering that Congress would allow the government to default on its loan obligations.
Tom Franks, a managing director at TIAA-CREF, a retirement fund management group, said of the potential default: “We knew it was going to be dramatic, but the consequences of a U.S. default are just so severe that the base case was always that a compromise was going to be reached.”
While default was averted, financial experts worry that the shutdown and partisan arguments have damaged faith in US reserve currency. Simon Derrick, a senior analyst at Bank of New York Mellon said foreign exchange investors like China will look for ways to diversify investments beyond an over-reliance on the dollar.
For more information, please see:
ABC News – US Debt Deal Hope Triggers Stock Market Rally – 16 October 2013
Al Jazeera – US Senate announces last-minute debt deal – 16 October 2013
BBC News – US debt ceiling: Senate passes US budget deal – 16 October 2013
CNN – Senate approves bill to end shutdown, avert possible default – 16 October 2013
Time – Stocks Surge After Senate Reaches Deal on U.S. Debt – 16 October 2013
