Senate leaders announce deal after furious negotiations

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WASHINGTON D.C. — Senate leaders on Wednesday announced a deal to end the partial government shutdown and avoid a possible U.S. default as soon as midnight, and a key GOP conservative said he wouldn’t try to block the measure.

The news of a deal brought some relief to Wall Street as well as Washington, where the shutdown reached a 16th day with the government poised to lose its ability to borrow more money to pay bills on Thursday.

Senate Majority Leader Harry Reid hailed the agreement he worked out with his GOP counterpart Mitch McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

Now the question becomes whether the agreement can win approval in the Senate and the House to reach President Barack Obama’s desk, perhaps by the end of Wednesday to ensure there is enough cash on hand for all U.S. debt obligations and bills.

President Barack Obama praised Senate leaders for reaching a compromise agreement to raise the debt ceiling and temporarily fund the government, and urged Congress to act quickly to approve the legislation, White House spokesman Jay Carney said.

Both chambers will have to take special steps to get the legislation passed quickly, raising concerns that tea party conservatives led by Sen. Ted Cruz of Texas would block or delay it in a final effort to include provisions intended to harm Obama’s signature health care reforms.

However, Cruz told reporters that he wouldn’t mount a filibuster or employ other procedural moves against the agreement.

At the same time, he criticized his Senate colleagues for what he called their failure to listen to the American people and said the fight against Obamacare will continue.

U.S. stocks opened sharply higher on news of the agreement to end the partisan fiscal impasse, with the benchmark Dow Jones Industrial Average jumping 200 points.

Short-term plan

Reid said the Senate deal under discussion would reopen the government, funding it until January 15. It also would raise the debt limit until February 7 to avert a possible default on U.S. debt obligations for the first time.

In addition, the agreement would set up budget negotiations between the House and Senate for a long-term spending plan.

McConnell fired an opening salvo for those talks, expected to begin soon and continue until December, when he said any ensuing budget deal should adhere to spending caps set in a 2011 law that included forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

Before Wednesday’s announcement, sources told CNN the agreement also would include a provision to strengthen verification measures for people seeking government subsidies under Obamacare.

The focus on an agreement shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans.

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