Washington (AP) – In the United States, the danger of a partial shutdown of government affairs is approaching from the end of the week.
Republicans blocked a formal vote in the U.S. Senate Monday evening (local time) on a proposal to secure government funding beyond the end of the budget year on Thursday.
The new fiscal year begins October 1, this Friday. If no fiscal settlement has been decided by then, parts of government will be shut down. US President Joe Biden absolutely wants to avoid this. But there is even more evil looming: a possible government default in October. In addition, Biden is fighting for the implementation of two huge investment programs – here, too, this week is expected to decide the president’s success or failure.
Shutdowns by parts of government occur more often in the United States. This means that some state employees should be granted compulsory leave or work temporarily without pay. Depending on the length of time, some government services may be restricted or payments may be delayed. In the past, such “shutdowns” lasted only a few days or hours, which means that the consequences are limited – even weeks, which can lead to major disruptions.
The House of Representatives passed the government’s temporary financing plan last week with the Democrats’ vote. In the Senate, however, the Republicans resisted. They complained that the bill also provided for the temporary suspension of the debt ceiling, which they reject.
According to Treasury Secretary Janet Yellen, if Congress does not raise the debt ceiling, the US government risks defaulting in October. It is not possible to give an exact day, but the government will run out of money “during the month of October,” Yellen warned for the last time. If the government was unable to service its debts in October, the US economy and financial markets around the world were threatened with “irreparable damage.”
Leading Democrats in the Senate and House of Representatives, Chuck Schumer and Nancy Pelosi, accused Republicans of blocking their blockade as utterly irresponsible. Schumer announced “further steps” for the week to raise the debt ceiling.
Democrats could possibly try to get this through Congress on their own, although these are usually bipartisan decisions. And they could potentially come up with a proposal to temporarily fund the government without changing the debt ceiling, and at least rally Republicans at this point. In any case, time is running out.
In addition, Biden is currently fighting to push through two projects central to his tenure in Congress: a large-scale package for infrastructure investments in the country and a second huge package for social investments. The two projects are still fragile in the face of internal discussions between the Democrats. Decisions on this subject are also expected this week.
According to Pelosi, the House of Representatives is expected to vote on the infrastructure package on Thursday. The package, with which roads, bridges and other transportation and energy networks in the United States are to be modernized, was passed by the Senate in August after lengthy negotiations – with the backing of Republicans. The final vote of the other House of Congress is still missing. About US $ 550 billion in new infrastructure investments are planned over the next few years. In total, including previously budgeted funds, the package is worth over $ 1 trillion.
The second package provides for a significant extension of social benefits. Biden, for example, wants to invest more in education and childcare, bring more support and tax breaks to families, and invest money in the fight against the climate crisis. This package is worth $ 3.5 trillion, also spread over several years. It must be financed by tax increases for high incomes and by a more consistent collection of taxes due.
Faced with opposition from the Republicans, the Democrats want to push the second package through Congress through special parliamentary procedure on their own. However, they only have narrow majorities in both chambers, and their plans are also controversial. Some moderate Democrats criticize the high spending, while some progressive Democrats would have liked more. The latter threatened to block the infrastructure package unless the second larger package was secured at the same time. Intensive negotiations are underway to organize majorities for both.