WASHINGTON – The Senate passed legislation Wednesday night to avert a U.S. debt default and end a federal government shutdown, a bipartisan deal set along President Barack Obama’s strict terms that left Republican little to show for the epic political drama that threatened to rattle the world economy.
The 81-18 vote sent the measure to the House of Representatives, which was expected to pass it later in the evening. Obama pledged to sign it “immediately” after the House vote.
The bill would reopen the government through Jan. 15 and permit the Treasury to borrow normally through Feb. 7 or perhaps a month longer. It includes nothing for Republicans demanding to eradicate or scale back Obama’s signature health care overhaul.
Congress faces a 11:59 p.m. deadline Thursday to raise the government’s borrowing authority or risk a default on its obligations.
“We fought the good fight. We just didn’t win,” conceded Republican House Speaker John Boehner as lawmakers lined up to vote on the bill.
At the White House, Obama hailed the Senate’s vote, saying that once the measure reaches his desk: “I will sign it immediately. We’ll begin reopening our government immediately and we can begin to lift this cloud of uncertainty from our businesses and the American people.”
The stock market surged earlier Wednesday at the prospect of an end to the crisis that had threatened to shake confidence in the U.S. economy overseas.
The Dow Jones industrial average jumped 205 points, or 1.4 percent, to close at 15,373, and the Standard & Poor’s 500 index rose 23 points, or 1.4 percent, to 1,721 points. The S&P 500 is now just 4 points below the all-time high it set Sept. 18. The Nasdaq composite rose 45 points, or 1.2 percent, to 3,839.
Yields on Treasury bills fell sharply as investors became less nervous about a potential default by the government.
More than 2 million federal workers — those who had remained on the job and those who had been furloughed — would be paid under the agreement.
Boehner and the rest of the top Republican leadership told their rank and file they would vote for the measure. But he vowed Republicans were not giving up on the fight to bring down U.S. debt and cripple the Affordable Care Act, as Obama’s health care overhaul is formally known.
“Our drive to stop the train wreck that is the president’s health care law will continue,” Boehner said in a statement.
Harry Reid, the Democratic Senate majority leader, thanked Sen. Mitch McConnell, the Republican minority leader, for working with him to end what had become one of the nastiest partisan battles in recent Washington history.
“This is a time for reconciliation,” Reid said.
A long line of polls charted a steep decline in public approval for the GOP in the course of what Republican Sen. John McCain pronounced a “shameful episode” in U.S. history.
The deal would end the bitter standoff for now, giving both parties time to cool off and come up with a broader budget plan or risk repeating the damaging cycle again in the new year.
The crisis began Oct. 1 with a partial shutdown of the federal government, after House Republicans refused to accept a temporary funding measure unless Obama agreed to defund or delay his health care law. It escalated when House Republicans also refused to move on needed approval for raising the amount of money the Treasury can borrow to pay U.S. bills, raising the specter of a catastrophic default.
Obama vowed repeatedly not to pay a “ransom” in order to get Congress to pass normally routine legislation.
The hard-right tea party faction of House Republicans, urged on by Sen. Ted Cruz of Texas, had seen both deadlines as weapons that could be used to gut the Affordable Care Act, designed to provide tens of millions of uninsured Americans with coverage. The Democrats remained united against any Republican threat to Obama’s signature program, and Republicans in the House could not muster enough votes to pass their own plan to end the impasse.
McConnell said the time had come to back away for now from Republican efforts to undermine Obama’s health care act. But the feisty minority boss said Republicans had not given up on erasing it from the legislative books.
Passage in the House will depend heavily on support from minority Democrats. The risky move was seen as imperiling the House leadership, but Boehner was apparently ready to do it to end a crisis that has badly dented Republican approval among voters.
Looking forward, lawmakers were also concerned voters would punish them in next year’s congressional elections. Polls show the public is more inclined to blame Republicans.
Republican Sen. Lindsey Graham said the party had hurt its cause through the long and dangerous standoff, noting, “This package is just a joke compared to what we could have gotten if we had a more reasonable approach.”