Thursday, October 17, 2013

President Obama signs bill, ends 16-day US government shutdown

After a 16-day crisis, government workers are set to return to office and government back on track with Obama signing a new bill effective through January 5 of 2014 (Reuters image) After a 16-day crisis, government workers are set to return to office and government back on track with Obama signing a new bill effective through January 5 of 2014 (Reuters image)

US President Barack Obama signed a bill Thursday morning to end a disruptive 16-day US government shutdown and increase the current debt ceiling of USD 16.7 trillion to prevent the country from a debt default with potentially worldwide economic repercussions.

Obama signed into law, the "Continuing Appropriations Act, 2014," which provides fiscal year 2014 appropriations for projects and activities of the Federal Government through Wednesday, January 15, 2014, White House Press Secretary Jay Carney said in a statement in the wee hours today.

"The effective time for the continuing resolution begins on October 1, 2013," Carney said, adding that the law also extends the Nation's debt limit through February 7, 2014.

The signing of the bill came just in time to prevent an imminent default as the US would have exhausted its borrowing power by the end of today.

"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 the sigh of relief that the international community now has after the passage of the bill by the Congress.

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.

Soon after Obama signed the legislation, the White House Office of Management of Budget issued a notice to federal agencies asking the furloughed employees to resume their duties.

"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.

Earlier, the Senate passed the legislation by 81-18 votes, while in the House of Representatives it was passed by 285-144 votes to end the government shutdown.

This means that the Democrats and the Republicans have a few months time to come out with a lasting solution to their sharp differences over budget issues, or else the country could very well plunge into another political and economic crisis as seen over three weeks.

Before the Senate and the House were to pass the legislation in quick succession, Obama had said he is willing to work with anybody to overcome this crisis.

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