The United Senate have announced that a deal has been reached among Senators to re-open the US government that was shut down 16 days ago and increase the debt ceiling.
The US government was forced to shut down sixteen days ago when the congress could not agree to pass the budget as the Republican members of the House of Representatives wanted amendments to ‘Obamacare’, which had already been passed into Law, but the Democrats in the House and the White House would not yield.
In the absence of a fully functional government the US Congress would be unable to reach an agreement to raise the US debt ceiling before Thursday 17 October 2013 when the US would have to meet its obligations to her creditors.
In theory, if the US debt ceiling is not raised by midnight 16th October 2013, the US economy could go into an unprecedented default, which many experts believe could have a devastating ripple effect on the rest of the world that would make the 2008 banking crisis look minor.
All eyes have been on the US for the past couple of weeks to see who would be the first to blink, the Republicans or the Democrats.
Members of the Senate have early Wednesday morning been working hard to iron out a deal.
Senator Harry Reid, the Senate majority leader and his Republican counterpart Senator Mitch Mcconnell, the Senate Minority leader, have announced on Wednesday that the Senate have reached a deal that would fund the government till January 15 2014 and raise the debt ceiling till February 17 2014.
The deal has been said to be only a suspension of the problem and not a permanent solution.