US government employees head back to work - PUNCH

October 18, 2013 by Agency Reporter 

Hundreds of thousands of US government employees are heading back to work after President Barack Obama signed a law ending a 16-day government shutdown and extending the US debt limit.

The cross-party deal came hours before the US government risked running out of money to pay its bills.

According to the British Broadcasting Corporation, China welcomed the deal, and the head of the International Monetary Fund called it “important and necessary”.

It followed 16 days of partial government shutdown.

The shutdown began when Congress failed to agree on a budget by 1 October.

Congress voted through the deal less than a day before a deadline to raise the $16.7tn (£10.5tn) debt limit.

Los Angeles views on the political crisis: “I thought it was ridiculous”

The measure approved in Washington funds the government to 15 January, and extends the Treasury’s borrowing authority until 7 February.

The deal, however, offers only a temporary solution and does not resolve the budgetary issues that fiercely divide Republicans and Democrats. Instead, it establishes a cross-party committee of legislators tasked with crafting a long-term budget deal over the coming months.

A faction of Republicans in the hardline Tea Party movement had pushed for the confrontation as a way to gut Mr. Obama’s healthcare reform.

However, Mr. Obama and the Democrats refused to negotiate, and the law commonly known as Obamacare has escaped relatively unscathed.

Politicians, bankers and economists had warned of global economic calamity unless an agreement to raise the US government’s borrowing limit was reached.

But IMF head Christine Lagarde’s positive response to the news was tempered by a call for further action.

“It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner,” she said in a statement.

Economists have estimated the shutdown cost the US economy billions of dollars.

The shutdown affected Americans and visitors to the US in countless ways: most national parks were closed, medical research ground to a halt, and ordinary paperwork went unfinished, delaying visa applications, business permits and safety inspections.

Hundreds of thousands of employees were put on leave without pay during the shutdown, with many forced to delay purchases or even payment of routine bills. A few days into the shutdown Congress passed a law ensuring they would receive back pay.

Before dawn on Thursday, the US Office of Personnel Management, which manages the federal workforce, announced in a terse statement on its website that government workers should return to work as regularly scheduled.