Senate heads 'close to budget deal'

Senate Majority Leader Harry Reid is a key player in the US budget negotiations
15 October 2013

US Senate leaders are nearing a deal in talks to reopen the government and prevent a default on debt that could tip the global economy back into recession.

But an agreement in the Senate would only move the country halfway toward solving a fight between Republicans and president Barack Obama's Democrats over government spending. Many conservatives in the House of Representatives were standing fast against the plan that would fund the government until January 15 and allow the Treasury to borrow money to pay bills until February.

With just two days left before the Treasury Department says it will run out of borrowing capacity, congressional aides predicted Senate Majority Leader Harry Reid and Republican leader Mitch McConnell could seal an agreement, easing dual crises that have sapped confidence in the world's dominant economy and badly shaken support for Republicans.

With Republican poll popularity plummeting and Americans growing weary of a shutdown entering its third week, Senate Republicans in particular were eager to end the impasse - and avoid an even greater crisis if the government were to default later this month.

The partial government shutdown, which has laid off 350,000 federal workers, began on October 1 after Congress failed to pass a bill to temporarily funding the government. Separately, if Congress does not approve a measure increasing the amount of money the government is allowed to borrow, the Obama administration says it will not be able to pay America's bills on time, risking a default that analysts say could prove catastrophic for the economy. Both measures are normally routine.

The plan under consideration is far from the assault on Mr Obama's signature health care reform law that conservative tea-party Republicans originally demanded as a condition for a short-term funding bill to keep the government fully operational. It also lacks the budget cuts demanded by Republicans.

Instead, it appeared likely to tighten income verification requirements for individuals who qualify for federal subsidies under the health care law and may repeal a fee that companies must pay for each person they cover beginning in 2014.

Any legislation backed by both Mr Reid and Mr McConnell can be expected to sail through the Senate, although any individual senator could delay it.

It is a different story in the Republican-controlled House of Representatives, where conservative backing is proving hard to find.

-AP

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in