The Debt Ceiling Has Been Raised and the Shutdown is Postponed
The Government shutdown lasted sixteen days and just a day ago, Americans feared the country would default on its debt. For now though the shutdown has been averted and the United States avoided financial disaster. After two weeks a deal has been made and President Obama signed into law the Continuing Appropriations Act, 2014. This will provide funds until January 15, 2014 and will extend the Nation’s debt limit through February 7, 2014. Government workers can also return to work and parks are re-opened.
The road to reaching a deal during the shutdown involved a lot of back and forth between Democrats and Republicans which were mostly unsuccessful. Last Thursday President Obama accused the House of holding the government hostage over the Affordable Care Act.
“This morning I had a chance to speak with Speaker Boehner,” said Obama. “And I told him what I've been saying publicly, that I am happy to talk with him and other Republicans about … But I also told him that having such a conversation, talks, negotiations shouldn't require hanging the threats of a government shutdown or economic chaos over the heads of the American people.”
The biggest scare during the shutdown was the United States hitting its self-imposed borrowing limit. Had a deal not been made the treasury would have been left with only $30 billion and whatever tax revenues were necessary to pay certain obligations. Programs and loans would not be paid on time and the U.S. Government faced defaulting for the first time.
Not only did the United States avoid a national and global economic crisis, but the Nation also avoided having its credit status lowered. Fitch Ratings, the third-largest credit-rating agency, said they would have lowered the rating from the current AAA status. Standard & Poor’s downgraded the rating to AA+ once already after 2011’s debt crisis.
[Source: White House]