Obama Signs Spending Measure To Reopen Government

With a last-minute deal in Congress to end the partial government shutdown, President Barack Obama signed a spending measure that will allow the U.S. to avoid defaulting on debt and avoiding a potential financial meltdown.

The deal is only temporary though, and funds the government through January 15^th and raises the debt ceiling until February 7^th, so another showdown is likely. Republicans dropped their demands to defund the Affordable Care Act, better known as Obamacare, in order to get the shutdown resolved. The political posturing by both parties was felt throughout the markets, and when news of the deal broke the response was positive. U.S. markets surged on Wednesday closing near all-time highs and Asian markets also responded with gains.

At a press conference at the White House Wednesday, President Obama said, "We can begin to lift this cloud of uncertainty and unease from our businesses and from the American people." He followed with, "Hopefully next time it won't be in the 11th hour. We've got to get out of the habit of governing by crisis."

The partial government shutdown did not affect essential functions such as defense and air traffic control, but national parks and agencies like the Federal Communications Commission have been closed or had staffing reduced dramatically.

Partisan Politics 

The vote in Congress signaled a temporary ceasefire between Democrats and Republicans. In the Democratic-led Senate, the spending bill was passed with an 81-18 vote, and in the Republican-led House, the vote was 285 to 144. With the showdown against Democrats, public opinion polls showed Republicans took a big hit over their unwillingness to negotiate, and leads to questions about what will happen when the temporary measure is set to expire.

The bitter political battle has worried U.S. creditors and has raised questions about the country’s ability to provide stability to the world economy. The Treasury has said the continued political unrest puts the country's reputation as a safe haven and stable financial center at risk.

One potentially positive development to come out of the spending deal is the creation of a bipartisan commission in the House and Senate to develop a long-term plan to reduce the deficit. Their recommendations would have to be approved by each branch of Congress, but it opens the door for more conciliatory workings.

Throughout the process, President Obama held fast to his refusal to negotiate changes to Obamacare and the deal is seen as a defeat for Republicans. Republican Senator Ted Cruz from Texas said the defeat was a “terrible deal” and felt that Republicans caved in too quickly in their effort to defund Obamacare.