US shutdown: Senate reaches fiscal deal Published duration 16 October 2013

media caption Democratic leader Harry Reid: "Our country came to the brink of disaster"

Republican and Democratic leaders of the US Senate have struck a cross-party deal to end a partial government shutdown and raise the US debt limit.

Their bill must also pass the House, where a small group of Republicans are expected to join Democrats to send it to President Barack Obama.

The measure extends the federal borrowing limit until 7 February and funds the government to 15 January.

It comes just a day before the deadline to raise the $16.7tn (£10.5tn) limit.

On Wednesday evening, the Senate and House of Representative are expected to vote on the deal.

On the floor of the US Senate, Democratic Majority leader Harry Reid called the legislation "historic", saying it would provide time for Congress to work toward a long-term budget agreement.

'Brink of disaster'

The plan would create a conference committee of Senate and House members tasked with drawing up a budget deal beyond the short-term spending bills that have served as the ad-hoc US budget for the past several years.

media caption Republican Senate Minority Leader Mitch McConnell: "This has been a long, challenging few weeks"

"Our country came to the brink of disaster," Sen Reid said. "This legislation ends a stand-off that ground the work of Washington to a halt."

Republican Senate Minority leader Mitch McConnell, Sen Reid's negotiating partner, said the deal "is far less than many of us hoped for, quite frankly, but far better than what some had sought," he said.

Republican House Speaker John Boehner said in a statement that "blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us".

"We fought the good fight," Mr Boehner said in an interview with an Ohio radio station. "We just didn't win."

Republican Senator Ted Cruz, a hardline conservative who was one of the architects of the government shutdown, said he would not try to stonewall Wednesday's vote.

Politicians, bankers and economists have warned of dire global economic consequences unless an agreement to raise the US government's borrowing limit can be reached.

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

It says those methods will be exhausted by 17 October, leaving the US unable to meet all of its debt and other fiscal obligations if the limit is not raised.

In the House, the Democratic caucus are expected to be joined by a number of more moderate Republicans in voting for the bill, analysts say.

"We're going to pass it in the House," Democratic House Minority Leader Nancy Pelosi told MSNBC.

In a statement, the US Chamber of Commerce, a pro-business lobby group, urged lawmakers to vote for the Reid-McConnell deal, while the hardline conservative Club for Growth said they should vote no.

'No winners here'

White House press secretary Jay Carney told reporters US President Barack Obama hoped both chambers of Congress "will move swiftly" to pass the Senate agreement.

Asked if the bill, which contained few concessions to Republicans, represented a win for the Obama administration, Mr Carney said: "There were no winners here."

"The economy has suffered," he added. "The American people have paid a price for this."

media caption LA views on the US crisis - "I thought it was ridiculous"

Hardline conservatives triggered the budget warfare 16 days ago, forcing the first government shutdown in 17 years by demanding that Mr Obama gut his signature healthcare overhaul plan.

Ratings firm Standard & Poor's said on Wednesday the partial federal closure had already taken $24bn out of the US economy and would cut growth significantly in the fourth quarter.

An estimated 700,000 of the 2.1 million-strong federal workforce were initially told to stay home, having been deemed "non-essential" staff.

Most national parks, museums, federal buildings and services were closed, while pension and military veterans' benefit cheques were delayed.

Although both parties have fared badly in opinion polls during the political stand-off, Republicans have borne the brunt of the blame from voters.