US government shutdown imminent as House, Senate hold split courses on funding

Washington – The US government looked all but certain to enter a partial shutdown on Sunday as House Republicans and Senate Democrats held to starkly different courses on funding, throwing into doubt everything from access to national parks to Washington’s massive support for Ukraine.

The Democratic-majority Senate planned another procedural vote on a stopgap Bill to fund the government through Nov 17.

The closure of all but critical government services, set to start after midnight on Sunday, would be the first since 2019 – immediately delaying salaries for millions of federal employees and military personnel.

Infighting among Republicans who control the House by a narrow 221-212 margin has pushed the United States to the brink of its fourth partial shutdown in a decade, with the House unable to pass legislation that would keep the government open beyond the Oct 1 start of the fiscal year.

The two chambers of Congress are deadlocked, with a small group of Republicans in the House of Representatives pushing back against stopgap measures that would at least keep the lights on.

On Friday, House Republicans defeated a plan proposed by their own leader, Mr Kevin McCarthy, to keep funds flowing,

deepening the sense of growing chaos within the party

ahead of the 2024 elections where former president Donald Trump hopes to return to the White House.

The White House Office of Management and Budget’s director Shalanda Young said there was “still a chance” of avoiding a shutdown if Republicans could end internal divisions.

Some hardline Republicans said a shutdown was worth it to achieve their goals.

“I fear the majority of the conference is willing to do anything to avoid the discomfort of a potential government shutdown,” Representative Bob Good told reporters. “If we don’t have the willingness to say ‘no’ and the resolve to say ‘no’, the Senate and the White House will not accept any spending cuts.”

And White House press secretary Karine Jean-Pierre made clear that President Joe Biden, who is seeking a second term in 2024, did not intend to wade in. “The conversation needs to happen between Speaker McCarthy and his caucus. That’s the fix, that’s the chaos that we’re seeing,” she said.

Speaking to the news outlet ProPublica on Friday, Mr Biden said Mr McCarthy has made “a terrible bargain. In order to keep the speakership, he’s willing to do things that he, I think, knows are inconsistent with the constitutional processes”.

Mr McCarthy, however, blamed Democrats, saying they are the ones blocking a solution.

Big question on Ukraine

All critical government services will remain functioning. But a shutdown would mean the majority of national parks, for example – from the iconic Yosemite and Yellowstone in the west to Florida’s Everglades swamp – would be closed to public access beginning on Sunday.

In Atlanta, festivities for former president Jimmy Carter’s 99th birthday were moved up from Sunday to Saturday to avoid disruption, according to local media.

With student loan payments resuming in October, officials said on Friday that key activities at the Federal Student Aid office would continue for a couple of weeks.

But a prolonged shutdown could cause bigger disruptions.

A shutdown “unnecessarily” places the world’s largest economy at risk, White House National Economic Council director Lael Brainard told CNBC.

Risks that could percolate through the wider economy include air travel delays, with air traffic controllers asked to work without pay.

Treasury Secretary Janet Yellen warned a closure could also delay infrastructure improvements.

“In the immediate term, a government shutdown will only reduce gross domestic product by 0.2 percentage points each week it lasts,” said a report released on Friday by the Centre for Strategic and International Studies, a US think-tank.

“However, halting critical trade functions of the United States will also undermine the US’ overall credibility as a commercial partner, impede ongoing negotiations and hinder export control enforcement capabilities,” the report added.

The mess casts a growing shadow over Mr Biden’s policy of arming and funding Ukraine in its war against the Russian invasion. For Republican hardliners behind the derailment of a new budget, stopping aid to Ukraine is a key goal. Mr McCarthy said he opposed US$6 billion (S$8.2 billion) in Ukraine aid included in the Senate Bill.

Most Republican members of Congress continue to support US backing for Ukraine, but the shutdown will at minimum raise questions over the political viability of renewing the multibillion-dollar flow of assistance. REUTERS, AFP