In an 11th-hour deal, the US Congress passed a bipartisan bill which was quickly signed into law by President Barack Obama today to end a 16-day government shutdown and avert a historic debt default by the world's largest economy that could have global repercussions.
Less than four hours before the midnight deadline, both chambers of the US Congress - the Senate and House of Representatives - passed the legislation by 81-18 and 285-144 votes respectively to prevent the catastrophic debt default and increase the current debt ceiling of USD 16.7 trillion.
President Obama immediately signed into law the bill, the "Continuing Appropriations Act, 2014," which provides fiscal year 2014 appropriations for projects and activities of the Federal Government through Wednesday, January 15, 2014.
"The effective time for the continuing resolution begins on October 1, 2013," White House Press Secretary Jay Carney said, adding that the law also extends the nation's debt limit through February 7, 2014.
Conceding defeat Republican House Speaker John Boehner said, "We fought the good fight; we just didn't win."
Though the passage of the legislation ends global anxiety as the default would have had cascading impact on the world economy, the bipartisan deal reached by the Republicans and the Democrats with the support of the White House buys time only for a few months, before which they need to renegotiate the issue and find a lasting solution to their differences.
Soon after Obama signed the bill, the White House Office of Management of Budget issued a notice to federal agencies asking nearly eight lakh furloughed employees to resume their duties today.
"Today, the President signed a continuing resolution that brings employees back to work and reopens many government functions. All employees who were on furlough due to the absence of appropriations may now return to work," Sylvia M Burwell, OMB Director, said in a memorandum.
The bill was passed hours before the US Government was to exhaust its borrowing capacity.
"This is good news for developing countries and the world's poor. The global economy dodged a potential catastrophe," said World Bank President Jim Young Kim, reflecting a sigh of relief.
IMF Managing Director Christine Lagarde said looking forward, it will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner.