Senator Harry Reid Announces Bipartisan Senate Deal To End Shutdown

US Capitol Dome (AP)

Senate leaders have reached a bipartisan deal to end the government shutdown and raise the debt ceiling.

If passed, the government could avoid a potential economic catastrophe just in the nick of time: the deadline to raise the debt ceiling is less than 12 hours away.

If lawmakers don't come to an agreement to raise the debt ceiling by 10 p.m. MST, the U.S. will be at risk of defaulting on its loans. Economists have long warned that the consequences of that could be devastating, and far eclipse the effects of the government shutdown, which is now into its 16th day.

Anticipating a failure of Congress to settle on a deal in time, global rating agency Fitch announced Tuesday that the United States' credit rating is under review.

The last best hope for avoiding a potential default rests with the deal crafted by Senate leaders Harry Reid and Mitch McConnell.

The pair got back to work on a bipartisan Senate deal late Tuesday night after briefly pausing while McConnell waited to see what would come of a proposed Republican deal in the House. The House deal got tossed out late Tuesday after the GOP failed to muster up enough votes.

The House deal, had it passed, was still unlikely to have made it past the Senate, as it called for changes to the Affordable Care Act in addition to reopening to government and raising the debt ceiling. President Obama and his fellow Democrats have been calling for a "clean CR," which means a deal that would end the shutdown and raise the debt ceiling with no strings attached.

The deal struck by Senate leaders would reopen the government through Jan. 15 and increase the nation's borrowing authority through mid-February.

But whether or not the country defaults on its loans, sources close to the situation have said, may ultimately rest with House Speaker John Boehner and what he decides. Facing pressure from the most conservative voices in his party in the days leading up to the shutdown and after, Boehner has refused to put previous deals up for a vote.

But many Republicans are on record calling for the shutdown to end and borrowing authority to be extended, regardless of changes made to "Obamacare." There is a belief in many political circles that there may be enough votes in the House to pass a Senate deal.

President Obama is calling for quick action.

"We don't have a lot of time. And so what I'm suggesting to congressional leaders is: let's not do any posturing, let's not try to save face."

According to the Associated Press, Reid thanked McConnell for his help in working out an agreement.