US Senate deal has been made to avoid govt shutdown: Schumer

Senate majority leader Chuck Schumer at the US Capitol in Washington on Sept 28, 2021. PHOTO: EPA-EFE

WASHINGTON (Bloomberg) - Senate majority leader Chuck Schumer said on Wednesday (Sept 29) that lawmakers had reached an agreement to avoid a government shutdown on Friday, extending government spending until Dec 3.

The legislation, scheduled for a Senate vote on Thursday morning, though important, will resolve perhaps the least of Mr Schumer's worries.

Federal agencies, pushed to the brink of the end of the fiscal year, had been preparing for a shutdown of non-essential parts of the government after Senate Democrats failed to push through a stopgap measure that included a suspension of the debt ceiling.

Sixty votes are required to proceed on most legislation in the evenly divided Senate.

Stripped of divisive language, the stopgap spending Bill should easily pass both chambers. But the threat of a catastrophic default is less than three weeks away and Democrats still have no solution to that problem.

At the same time, the main pieces of US President Joe Biden's massive domestic agenda remain mired in Congress over internecine Democratic squabbles, and had been shadowed by the threat of a shutdown.

"Now, we are ready to move forward," Mr Schumer said on the Senate floor. "We have an agreement on... the continuing resolution to prevent a government shutdown and we should be voting on that tomorrow morning."

The House on Wednesday approved a stand-alone debt limit measure, but that, too, is almost certain to fail in the Senate. Treasury Secretary Janet Yellen has warned that without congressional action, the United States risks a disastrous default around Oct 18.

Republicans have said they will not vote for an increase to the government's borrowing ability as Democrats prepare to spend US$3.5 trillion (S$4.8 trillion) on social programmes via separate legislation.

Democrats themselves remain at odds on that plan. The US House is scheduled to vote on Thursday on Mr Biden's US$550 billion infrastructure package, but progressive Democrats have pledged to vote it down without action on the broader social spending measure.

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