‘We must get out of the habit of governing by crisis’: Obama speaks as last-minute deal brings US back from brink of debt defaul

Signing through the short-term budget solution just after midnight local time, the President says Government departments will start to reopen immediately

An eleventh-hour deal to pull the United States back from the precipice of defaulting on its debt and to re-open the government until the middle of January next year has been successfully passed by Congress.

It came following a deal struck by the Senate which adhered strictly to the terms set by President Barack Obama three weeks ago, leaving Republicans little to show for the epic political drama that threatened to rattle the world economy.

A landslide vote of 81 to 18 sent the measure over to the Republican-majority House of Representatives, which passed it by 285 to 144.

The President then signed the agreement through immediately, just after midnight local time.

Speaking shortly before the deal was put before him, Mr Obama said: “There’s a lot of work ahead of us, including our need to earn back the trust of the American people that has been lost over the past few weeks.

“Despite the differences over the issue of shutting down our Government, I’m convinced that Democrats and Republicans can work together to make progress for America.

“Hopefully next time it wont be in the eleventh hour. One of the things I've said throughout this process is we have got to get out of the habit of governing by crisis.

“There is no reason why we cant work on the issues at hand, disagree while still being agreeable, and make sure we are not inflicting harm on the American people when we do have disagreements.”

The President added that Government departments would begin to reopen immediately, and said they would “begin to lift this cloud of uncertainty from our businesses and from the American people”.

Congress had faced a deadline of 11.59pm local time to raise the government's borrowing authority or risk a default on its obligations – a threat which international observers had warned could have been devastating to the world economy.

The bill reopens the government through to 15 January and permits the Treasury to borrow normally through to 7 February or perhaps a month longer.

“Our country came to the brink of disaster,” Senator Harry Reid, the Democrat majority leader, conceded announcing a compromise Bill on the Senate floor. “It’s been a long challenging few weeks for Congress and the country,” Mitch McConnell, the Republican minority leader, added, confirming the sealing of the package.

The end to the crisis came just hours before a Thursday deadline when the US Treasury said it would run out of wiggle room to pay all its bills without an increase of the debt ceiling, including to holders of US Treasury bonds. The partial shutdown of the US government was already in its third week, with 350,000 federal governments workers furloughed at home without pay.

Yet the underlying squabbles are by no means resolved. The deal will set up a bi-partisan, bi-cameral committee to attempt one more time to settle - by Christmas - the broader range of spending and budget issues that have been so toxic in this town for so long. Because the funding for the government will only extend to mid-January and the debt ceiling increase until mid-February there is a risk the same drama will be playing out all over again a few months from now. “This isn’t the last crisis we are going to go through,” Senator John McCain of Arizona noted.

Ted Cruz said he would not gum up the vote in the Senate (Getty) 

For now, the deal represents a white flag for conservative Republicans and the right-wing Tea Party, which achieved almost nothing of what they set out to achieve with this crisis, notably to pare back or delay President Obama’s healthcare overhaul legislation known as Obamacare. Put forward instead was an almost entirely “clean bill” with only slight amendments to the health law to guard against fraudulent claims for government help by citizens to pay premiums.

Efforts by John Boehner, the House speaker, to push a tougher version of his own through the House had fallen apart late Tuesday night, which passed the ball to the Senate. He was unable to bring all of his conservative flank on board for his bill, a humiliating spectacle for a man who holds one of the most powerful positions in Washington.

Republican recriminations were already beginning for its misbegotten tactics. “This package is a joke compared to what we could have gotten if we had a more reasonable approach,” Senator Lindsey Graham of South Carolina complained. “For the party, this is a moment of self-evaluation, we are going to assess how we got here. If we continue down this path, we are really going to hurt the Republican Party long-term.”

Traders work on the floor of the New York Stock Exchange (Getty)

‘The women are taking over’: Female Senators driving force behind deal

It was Kelly Ayotte, a Republican senator from New Hampshire who was propelled to Washington with considerable Tea Party help, who broke the news to reporters crushed into a corridor outside the office of Senate Majority Leader Harry Reid. A bi-partisan deal to end the long fiscal crisis was done, said Ms Ayotte.

That was fitting. By nearly everyone’s account, women in the Senate had played an outsize role in setting in train the negotiations that allowed for what seemed to be the breakthrough. 

Even some of the oldest members of the male guard admit it. “The women are taking over,” Senator John McCain quipped the other day.

While it was Mr Reid and his Republican opposite number Mitch McConnell who put their names to the Senate package, its origins could be traced back to a framework solution negotiated by an informal, bi-partisan group of 13 senators, about half of whom had been women. (There are 20 female senators, one-fifth of the full chamber.) It was risky political business, particularly for Ms Ayotte, with her Tea Party genetics, as well as for another closely involved, Lisa Murkowski, a Republican from Alaska who won re-election as a write-in after losing her primary race to a Tea Party rival. “Politics be damned,” she declared earlier this week.

Assuming the Senate solution makes it all the way to Barack Obama’s desk, history may give greatest credit, however, to Senator Susan Collins, a reliably moderate Republican from Maine, who moved first to challenge colleagues from both sides of the aisle to put politics aside and chart Washington out of its mess.

“I don’t think it’s a coincidence that women were so heavily involved in trying to end this stalemate,” Senator Collins said. “Although we span the ideological spectrum, we are used to working together in a collaborative way.”

David Usborne