UPDATE 12:45 a.m. EST
The House passed the Senate's bill which reopens the government and raises the debt ceiling, officially ending the 16-day federal shutdown. President Obama then signed the bill early Thursday morning, according to the White House.
UPDATE 4:11 p.m. EST
Republican House Speaker John Boehner states that "Blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us."
UPDATE 1:10 p.m. EST
The Senate has announced a bill to raise the national debt ceiling which is expected to come to a vote later on tonight, possibly "after dinner," a senior GOP Senate aide said, according to CNN.
Texas Sen. Ted Cruz, the Republican who has led efforts to undercut Obamacare, has announced that he will not try to block the vote while Pres. Obama annoucned that he is on board with the Senate deal.
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Time is running out as the deadline for congress to raise the U.S. debt ceiling to avert a national default is less than 24 hours away. However, there's good news: inside sources on Capitol Hill say that a bipartisan bill has been drafted in the Senate to raise the nation's $16.7 trillion debt limit.
Now, it's up to the House to pass the bill and get it to President Obama's desk in time for him to sign.
According to CNN, Senate leaders worked out a deal to reopen the government and avoid a potential U.S. default at midnight on Wednesday.
Republican leaders met before a gathering of the Senate's full GOP caucus and Sen. Kelly Ayotte said an announcement would be coming soon.
According to sources, the Senate deal under discussion would reopen the government, funding it until Jan. 15. It would also raise the debt limit until Feb. 7 to avert a possible default on U.S. debt obligations for the first time.
In addition, the deal 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.
If the Senate passes an agreement, House Speaker John Boehner may have to break Republican tradition to help end the crisis by introducing a bill he knows can only pass with virtually all Democrats and only a few of his fellow Republicans supporting it.
Even so, it could take a day or two more for a deal to make it through the legislative process. By then, the nation will have run out of borrowing authority.
If Washington doesn't reach a deal to avert a national default, then an economic crisis could start unfolding Thursday that would eventually leave millions of Americans out of work. In the beginning, however, many people would not notice when the government hits a $16.7 trillion cap on its debt since checks would likely go out on time that day for everyone from bondholders to workers who are owed unemployment benefits, according to analysts in government and the private sector, reports Reuters.
To keep from adding to the national debt, the government may be forced to slash spending by about a third each day by cutting funding to critical programs that millions of Americans depend on like social security, WIC and food assistance. Additionally, soldiers could stop getting paychecks on time while spending would fall across the country leading up to a second Great Recession, reports Mother Jones.
There's also a possibility that the U.S. may default on U.S. treasury bonds either instead or in addition to cutting essential government programs. This would likely devastate the global economy since the global market depends on U.S. bonds being rock solid. As a result, this would raise the additional risk that interest on treasury bonds might not get paid.
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