US braced for government shutdown

Millions of Americans are braced for pay and welfare cheques to stop within days as congress careened toward a damaging government shutdown.

The stakes are high for President Joe Biden if the US government shuts down this weekend. Picture: AFP

Millions of Americans are braced for pay and welfare cheques to stop within days as congress careened toward a damaging government shutdown, with Republican right-wingers blocking attempts to pass a budget.

Four months after barely avoiding the more serious prospect of a credit default, the world’s largest economy is again on the verge of a convulsion, with the lights due to go out at the weekend.

Republicans leading the House of Representatives – hamstrung by hardline rebels demanding deep spending cuts – have been unable to pass the usual series of bills setting out departmental budgets for the next financial year, which ­begins on Sunday.

The party’s leadership does not even have the votes to advance a short-term funding bill at 2023 spending levels – known as a continuing resolution –to keep the government open past midnight on Saturday.

A shutdown would put at risk the finances of workers at national parks, museums and other sites operating on federal funding, but it could also carry significant political risk for President Joe Biden as he runs for re-election next year.

“Funding the government is one of the of the most basic, fundamental responsibilities of the congress,” Mr Biden said at the White House overnight on Monday.

“And if Republicans in the house don’t start doing their job we should stop electing them.”

The Biden administration also warned that seven million people who relied on the food aid program for women and children could also have their money stopped.

The funding deadlock arose after House Republicans refused to support the government spending levels agreed between Mr Biden and Speaker Kevin McCarthy, the top Republican in congress, that would keep government gears turning.

Another major sticking point has been a request for additional aid for Kyiv, after Ukrainian President Volodymyr Zelensky visited congress last week pleading for more weapons to battle Russian forces 18 months into the war.

Both parties in the Senate support the $US24bn aid bill, but a handful of hardline Republicans in the house are threatening to block any funding measures that include the aid.

“UNLESS YOU GET EVERYTHING, SHUT IT DOWN!,” former president Donald Trump demanded in a post on his Truth Social platform late on Sunday as he led calls for the Republican hardliners to dig in.

The budget vote in congress regularly turns into a standoff, with one party using the prospect of a shutdown to seek concessions from the other, usually without success.

Mr Trump, who is also running for re-election, forced a 35-day shutdown over border controls in 2018 but reopened the government after failing to secure a single concession from Democrats.

The impasse is invariably ­resolved before the stand-offs ­become crises but this year the showdown is ­exacerbated by new levels of ­polarisation on Capitol Hill.

In the Senate, debate is led by two political heavyweights, Democratic Majority Leader Chuck Schumer and Mitch McConnell, his Republican counterpart.

Senator Schumer has been paving the way for a continuing resolution, including Ukraine aid, in talks with Senator McConnell and the White House.

A measure that would keep the government open through to early December has support on both sides of the Senate, but would likely not be ready for a vote before the shutdown and would not have the support of the Republican right.

The shutdown prospect comes just four months after the US came dangerously close to defaulting on its debt, which could have had disastrous consequences for the American economy and beyond.

Moody’s, the only major ratings agency to maintain its maximum score for US sovereign debt, warned that the latest drama could threaten its top-tier status.

The US government employs more than two million civilian workers, and uniformed military personnel and federal contractors. Civil servants deemed “non-­essential” would be asked to stay home during a shutdown, getting paid only on their return.

AFP