US Senate reaches deal to end shutdown, avoid default

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Senate leaders on Wednesday worked out a deal to reopen the government and avoid a potential U.S. default as soon as midnight, sources told CNN’s Dana Bash and Ted Barrett.
Republican leaders met before a gathering of the Senate’s full GOP caucus and Sen. Kelly Ayotte said an announcement would be coming.
“I understand that they’ve come to an agreement but I’m going to let the leader announce that,” Ayotte said on her way in to the leadership meeting.
Exact details of the Senate plan were not known. Nor was it clear how the Senate and House would proceed in considering the measure.
Both would have to take special steps to get it passed and to President Barack Obama’s desk before the government’s ability to borrow money expires on Thursday.
Legislators dropped hints on their way home on Tuesday that Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell, would quickly finalise an agreement in the works all week.
U.S. stocks opened sharply higher on expectations Washington would end its partisan fiscal impasse. The benchmark Dow Jones Industrial Average climbed toward 200 points.
Short-term plan
According to sources, the Senate deal under discussion would reopen the government, funding it until January 15. It would also raise the debt limit until February 7 to avert a possible default on U.S. debt obligations for the first time.
It also would set up budget negotiations between the House and Senate for a long-term spending plan, and would include a provision to strengthen verification measures for people seeking government subsidies under Obama’s signature health care reforms.
The focus shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party …

Source: BusinessDay

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