US shutdown: Congress approves debt deal

The US government is to reopen after Congress has passed a bill to raise the federal debt limit, with hours to spare before the nation risked default.

The Democratic-controlled Senate passed the measure by 81 votes to 18, and the Republican-controlled House of Representatives by 285 votes to 144.

Despite reluctant support from the House Republican leadership, most of the party’s lawmakers voted against it.

It came hours before the deadline to raise the $16.7 trillion limit.

The bill yanked the US back from the brink of a budgetary abyss by extending the treasury’s borrowing authority until February 7.

It also funds the government to January 15, reopening closed federal agencies after 16 days of partial government shutdown and bringing hundreds of thousands of employees back to work.

President Barack Obama signed the bill into law early on Thursday morning.

The White House budget office said federal workers should return to work on Thursday.

The deal, however, offers only a temporary solution and does not resolve the budgetary issues that fiercely divide Republicans and Democrats.

President Barack Obama warned that US lawmakers must “earn back the trust of the American people”.

“We’ve got to get out of the habit of governing by crisis,” Democratic Barack Obama added, speaking after the Senate vote on Wednesday evening.

“My hope and expectation is everybody has learned there’s no reason why we can’t work on the issues at hand, why we can’t disagree between the parties without still being agreeable and make sure that we’re not inflicting harm on the American people when we do have disagreements.”

Also speaking after the first vote, Senate Democratic Majority leader Harry Reid said: “Let’s be honest, this is pain inflicted on a nation for no good reason and we cannot, cannot make the same mistake again.”

The US Treasury has been using what it called “extraordinary measures” to pay its bills since the nation reached its current debt limit in May.

It said those methods would be exhausted by October 17, leaving the US unable to meet all of its debt and other fiscal obligations.

Politicians, bankers and economists had warned of dire global economic consequences unless an agreement to raise the US government’s borrowing limit was reached.

Meanwhile, ratings firm Standard & Poor’s said on Wednesday that the partial US government shutdown, the first in 17 years, had already shaved $24 billion from the American economy and would cut growth significantly in the fourth quarter.