US shutdown: Vote averts debt default, but fix is temporary
Congress passes bill that ends shutdown and moves US away from 'fiscal cliff', but only until February
AMERICA has pulled back from the brink of catastrophic debt default after Congress approved an eleventh-hour deal ending the standoff.
But the "down-to-the-wire fix" offers only a temporary solution, says Reuters. It funds the government until 15 January and raises the debt ceiling until 7 February. As a result, Americans face the possibility of "another bitter budget fight and another government shutdown early next year".
The bill raising the borrowing limit and ending the partial shutdown of the US government was passed by 81 votes to 18 in the Democratic-controlled Senate. But in the House of Representatives - where hardline Republicans have been fighting tooth-and-nail to damage or destroy President Obama's universal healthcare laws - the vote was closer. The bill passed by 285 to 144 votes after Republicans "begrudgingly" agreed to support the measure, the BBC reports.
Acknowledging the damage caused by the shutdown, President Obama warned that US lawmakers must "earn back the trust" of Americans. "We've got to get out of the habit of governing by crisis," he said after last night's Senate vote.
While both sides of politics have been damaged by the chaotic events of the past few weeks, the New York Times says Republicans are bearing the brunt of public anger. Instead of damaging Obamacare - which has emerged largely unscathed - the party has "focused harsh scrutiny on its own divisions, hurt its national standing and undermined its ability to win concessions from Democrats", the paper says.
And after all the drama, says the NYT, the Republicans "surrendered almost unconditionally".
But is the US out of the woods? The deal approved by Congress last night will send about 450,000 government employees back to work today and "restart paychecks for the 1.3 million employees who stayed on the job during the shutdown", says the Washington Post.
But the shutdown, which removed more than $20bn in direct government spending and related economic activity, has already damaged the US economy. And the deal to end it "creates new perils" and sets up "other economy-shaking deadlines in just a few months," the paper says.
The biggest failure of the agreement is that it keeps the government operating for only a few months before the US will again face the prospect of a shutdown and another 'fiscal cliff'. As a result, says the Post, consumers and businesses are "likely to hold back on spending and investment during the important holiday season, knowing that a similarly economy-shaking political showdown might be right around the corner".
"The US economy dodged a bullet today. But the reprieve will be short," financial analyst Paul Edelstein states. ·