Shutdown Will End, Debt Ceiling Extended ... For Now
Political leaders reached an agreement Wednesday on a temporary government funding bill and a temporary extension of the nation's debt limit. The agreement provides a path out of the current toxic environment that led to the standstill, but it also puts off the difficult issues for only a few months.
The agreement will fund the government until Jan. 15, increase the national debt limit to allow enough borrowing until Feb. 7, and set up a conference committee composed of members from both houses and both parties to come up with a longer term agreement by Dec. 13. The agreement will also include back pay for federal workers and one small change to the Affordable Care Act, or "Obamacare," – income verification will be required for all beneficiaries of ACA subsidies.
The government shutdown began when Republicans demanded changes to the ACA in exchange for funding the government. President Barack Obama and congressional Democrats insisted they would not negotiate. In the end, they split the difference. Obama and the Democrats did allow one change to the ACA, but it is a modest one.
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The income verification was actually in the ACA when it was first passed by Congress in 2009. It was later removed by the Obama administration by executive order. So, the Democrats are only agreeing to put back in the law something that was already in the law to begin with.
Though the agreement was reached in the Senate, by Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), the House will pass the measure first so that it can move more quickly through the Senate.
Sen. Ted Cruz (R-Texas), who led the effort to defund the ACA, which led to the shutdown, announced Wednesday morning that he would not try to block passage of the bill. He blamed Senate Republicans for the failure of his effort.
"Had Senate Republicans united and supported House Republicans the outcome of this would've been very, very different," he said.
To reach a longer term agreement, the differences between the two sides appear daunting, but if each side is willing to give the other side something it wants, there is a path forward that both sides recognize.
Democrats want some relief from the sequester so they can spend more on government programs. Republicans want entitlement reforms, including the ACA, that would lower the growth rate of those programs. This will be the starting point for any agreement by the conference committee.
The basic outlines of such an agreement has been tried before, and failed. In the Summer of 2011, Obama and Speaker of the House John Boehner worked on a similar agreement, which was dubbed the "grand bargain." When that failed, a "super committee" was created to reach a compromise, but it also failed.
