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Boehner sides with Senate in debt deal

By Mark Hamrick · Bankrate.com
Wednesday, October 16, 2013
Posted: 12 pm ET

With hours left before a Thursday default deadline, Senate leaders announced a deal aimed at reopening the government, avoiding what was generally regarded as a potential financial catastrophe.

The proposal would give the Treasury Department authority to continue borrowing through Feb. 7, 2014, with the U.S. government funded through Jan. 15, 2014. The government has been partially shut down since Oct. 1, resulting in furloughs of hundreds of thousands of workers.

Majority Leader Harry Reid, D-Nev., speaking on the Senate floor, said the legislation will provide an opportunity to "work toward a long-term budget agreement that prevents these frequent crises."  Reid said, "Most importantly, this legislation ends a standoff that ground the work of Washington to a halt this fall."

Reid said, "This is a time of reconciliation."

Speaking for Republicans, Minority Leader Mitch McConnell, R-Ky., said, "this has been a long, challenging few weeks for Congress and the country."

House Speaker John Boehner, R-Ohio, interviewed by WLW Radio in Cincinnati, said he's encouraging fellow Republicans to vote for the crisis-diffusing legislation. Said Boehner, "We fought the good fight, we just didn't win."  The sticking point for agreement had been disarray in the House of Representatives, where Boehner had not been able to bridge the gap between tea party sympathizers and GOP moderates. Ultimately, it fell to Senate leaders to forge the deal.

Earlier this morning, Fitch Ratings warned it was placing the U.S. government's long-term debt on review for a possible downgrade. In its report, Fitch said, "Prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S."

Billionaire investor Warren Buffett told CNBC he didn't expect the nation would fail to pay its bills. But failure to do so is a "political weapon of mass destruction" that he said would be a "pure act of idiocy" and "asinine."

Sen. Ted Cruz, R-Texas, announced that he would not block the deal, while calling on Americans to "continue to rise up" against Obamacare.

What do you think of the potential deal? What should the government be doing? Tweet me @hamrickisms.

 

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