Fears of a US gov’t shutdown as Republicans block spending bill

The United States is facing a potential federal government shutdown by the end of the week after Senate Republicans on Monday blocked an emergency spending bill.

The legislation by President Joe Biden’s Democrats was aimed at averting a government shutdown by a Thursday deadline and a federal debt default by mid to late October.

If left unaddressed, the two fast-approaching deadlines threaten to destabilise the US economy as it struggles to emerge from the COVID-19 pandemic.

The near party-line vote of 48 votes to advance against 50 opposed fell short of the 60 votes needed to push the bill ahead in the 100-seat Senate. Senate Democratic leader Chuck Schumer voted “no” to allow him to call another vote.

Democrats who narrowly control both chambers of Congress now have just three days to find another way to keep the government operating beyond Thursday – when current funding expires.

Legislators also will have to figure out how to raise the debt ceiling to head off the risk of default, with analysts warning that the US Treasury Department is likely to exhaust its borrowing authority fully sometime between October 15 and November 4.

“The Republican party has now become the party of default,” Schumer said on the Senate floor. “The party that says America doesn’t pay its debts. Our country is staring down the barrel of two totally Republican manufactured disasters – a government shutdown and a first-ever default on the national debt. Impacts of both will gravely harm every single American in this country.”

According to The New York Times newspaper, the package that was blocked on Monday included emergency aid to support the resettlement of Afghan refugees and disaster recovery. The Times said the package would keep all government agencies funded through December 3 and increase the debt ceiling through the end of 2022.

Al Jazeera’s Shihab Rattansi, reporting from Washington, DC, said a federal government shutdown would mean “no money for employing people – therefore all but essential staff will be furloughed without pay”.

“That has enormous ramifications for government agencies, for food stamps, for the Centers for Disease Control and Prevention, the CDC. Some 62 percent of CDC employees could be furloughed without pay during a pandemic, during an economic downturn,” he explained.

Al Jazeera’s Heidi Zhou-Castro meanwhile said the failed Senate vote meant “the clock is ticking”.

Zhou-Castro explained that legislators from both parties want to prevent a government shutdown and to shield the US from defaulting on its debt, but they disagree on how to achieve those goals.

“The bill that Democrats crafted, which has failed to advance in the Senate, sought to address both the government shutdown and the debt ceiling … The problem is Republicans have agreed to continue funding the government past this week; however, they have said they will not help in raising the debt ceiling,” she said.

“Democrats must now scramble in an increasingly narrow window to come up with another solution.”

Republicans say they do not support the Democrats’ spending plans and want the Democrats to lift the debt limit on their own. But Democrats point out that much of the country’s new debt was incurred during the administration of former President Donald Trump, a Republican.

Senate Republican leader Mitch McConnell said he would try to force the chamber to vote for a funding extension, separate from the provision that would suspend the government’s $28.4-trillion debt limit through the end of 2022.

“We could have a bipartisan vote to fund the government today, if not for the odd tactics of the Senate Democratic leader,” he said on the Senate floor.

The upper chamber is now likely to send a “clean” continuing resolution back to the US House of Representatives to pass without the debt-limit provision, averting the shutdown for two months.

That would leave the debt-limit problem unresolved, however – a worrying outcome that will make the markets increasingly jumpy as the mid-to-late October deadline draws closer.

Al Jazeera’s Rattansi said the issue of the debt ceiling could have “catastrophic effects on both the US domestic economy and also the world economy”.

“The debt ceiling concerns the amount of money the government is allowed to borrow in order to pay its debts,” he said. “We are not just talking about the federal government’s debts to its employees, but also servicing its bonds, its debts on the international market.”

The Republican opposition to the emergency spending bill comes during a high-stakes week, with Democrats also trying to progress on Biden’s sweeping economic agenda – a $1 trillion infrastructure bill and a $3.5 trillion social spending package.

The Times said the stalemate over the deadline to fund the government “reflected a bid by Republicans to undercut” Biden’s economic plan, at a time of divisions between the moderate and progressive wings of the Democratic Party.

The infrastructure bill, which moderate Democrats favour, would fund road, bridge, airport, school and other projects. It passed the Senate last month with considerable Republican support.

But progressive Democrats have threatened to oppose the measure unless moderate Democrats in both the House of Representatives and Senate agree to the larger package, which they intend to pass without Republican votes.

Moderate Democrats, however, say the social spending bill’s $3.5 trillion price tag is too high, and Democrats including House Speaker Nancy Pelosi have acknowledged it will need to be scaled back to pass.

The rifts risk derailing Biden’s presidency and the party’s hopes of keeping its congressional majorities in next year’s midterm elections.

House Democrats emerged from a Monday night meeting confident they would bridge their differences.

“I think we’re going to get there,” said Steny Hoyer, the chamber’s second-highest-ranking Democrat.