Still No Deal to End Shutdown, Raise Debt CeilingImage Banner

Still No Deal to End Shutdown, Raise Debt Ceiling

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Still No Deal to End Shutdown, Raise Debt Ceiling

October 15, 2013

This week started with a flurry of speculation over a deal possibly coming as early as Monday night to temporarily fund the government and raise the debt ceiling as the White House announced plans to meet with key Congressional leaders at some point during the day. By the end of the fourteenth day of the federal shutdown, however, a the promise of a deal proved ephemeral as no meeting materialized. Senate leaders Harry Reid (D-NV) and Mitch McConnell (R-KY) indicated late in the day that they believed they were close to coming to an agreement that would pass the Senate and resolve, for another several months at least, both the government shutdown and the need to raise the country's borrowing limit in order avoid a default on obligations already incurred. Preliminary details indicate that the deal would not involve defunding or repealing any part of the Affordable Care Act (ACA), but would give agencies increased flexibility to manage mandatory sequestration cuts. Senators are expected to meet on Tuesday to continue to hash out the agreement. Key members of the House have not commented on the likelihood that a deal agreed to by Senate Republicans and Democrats would pass through the lower chamber.

Time is running out for a deal to be struck. The United States exhausted its ability to borrow money earlier this year, but has been relying on "extraordinary measures" taken by the Treasury Department to continue to make its payments. According to Treasury Secretary Jack Lew, those measures will run out on Thursday, leaving the United States without the means to pay its bills. The issue of the debt ceiling has become the focal point of discussions inside the beltway, with somewhat less attention being paid to the government shutdown which has furloughed more than three-quarters of a million federal workers, and delayed pay for two million. If a deal is not in place by Thursday, the United States risks defaulting on its obligations which could impact the global financial market.