The United States have set to stand on the precipice of a potential government shutdown, with less than two weeks remaining for lawmakers to reach consensus on a short-term spending bill.
As the deadlock intensifies, multiple budget bills are under debate in the nation’s capital, yet none muster the necessary support to pass both the Democrat-led Senate and the Republican-controlled House of Representatives.
The clock is ticking, with a looming midnight deadline on September 30, by which time an agreement must be reached to avert a shutdown that would disrupt government services and leave hundreds of thousands of workers facing unpaid furloughs, as federal properties such as parks and museums close their doors.
Although most policymakers are eager to avoid such a situation, a faction of former President Donald Trump’s supporters has steadfastly opposed every bill on the table, escalating the partisan divide.
The White House expressed its frustration in a statement, decrying, “With less than two weeks before the end of the fiscal year, extreme House Republicans are playing partisan games with people’s lives.”
One of the pivotal issues complicating the budget negotiations is the allocation of $24 billion in military and humanitarian aid for Ukraine. While this plan enjoys bipartisan support in the Senate, it faces staunch opposition from some members of the House, including far-right Representative Marjorie Taylor Greene, who vowed, “I will not vote to fund a single penny to the war in Ukraine, COVID anything, and the political weaponized government.”
This impasse has significant implications for the ongoing conflict in Ukraine, especially as U.S. President Joe Biden is scheduled to meet with Ukrainian President Volodymyr Zelensky in Washington later this week.
Senate Democratic Majority Leader Chuck Schumer remarked, “At the very same time that President Zelensky comes to the United States to make the case for standing firm against Russian President Vladimir Putin, Republican leadership in the House of Representatives are essentially telling him ‘You’re on your own.'”
The looming threat of a government shutdown is the second fiscal crisis to hit the world’s largest economy in recent months. In June, the United States narrowly avoided a potential debt default, thanks to a Senate vote to suspend the federal debt limit after weeks of tense negotiations.
While a debt default would have been unprecedented, the nation has experienced government shutdowns before, most notably a 35-day closure from late 2018 to early 2019 during Donald Trump’s presidency, marking the longest in U.S. history.
EY chief economist Gregory Daco warned that a shutdown at this juncture could have a visible impact on the economy, estimating that “each week of government shutdown will cost the U.S. economy $6 billion” and trim GDP growth by 0.1 percentage points in the fourth quarter. Daco also cautioned that the financial markets and private sector confidence could be adversely affected, underscoring the gravity of the current fiscal standoff.