Concerns Grow Over Possible US Government Shutdown
September 24, 2023
The United States Congress is facing delays in processing the budget for the upcoming fiscal year, raising concerns about a potential government shutdown starting next month. Reports from US media suggest that passing a temporary budget bill to address the issue may be unlikely due to opposition from hard-line Republican lawmakers who currently dominate the House of Representatives.
The Financial Times (FT) reported on September 23rd that a shutdown of the US government is highly probable from the 1st of next month since it appears challenging for the US Congress to pass the budget for the 2024 financial year before the end of this month. To avoid a shutdown, the US Congress must pass 12 federal appropriations bills by the 30th. However, neither the Senate nor the House of Representatives have managed to pass any appropriations bill thus far. Should a shutdown occur, a majority of the federal government’s operations, except for essential functions such as defense and national security, will be suspended.
In an effort to prevent a shutdown, Republican House Speaker Kevin McCarthy has proposed a temporary budget plan worth $1.471 trillion to be allocated by the end of next month. This proposal also includes a budget to strengthen border controls, which aims to secure support from hard-line Republican lawmakers. Additionally, some of the welfare budget requested by the majority Democratic Party in the Senate has been included.
However, the Speaker’s attempt to reach a bipartisan deal or cooperate with the Democratic Party has led critics to threaten McCarthy with removal from his position. Currently, the House of Representatives consists of 222 Republican seats and 212 Democratic seats, with one vacant seat. If four or more Republicans choose to vote against the proposal, it will fail to pass. Therefore, the influence of approximately 10 hard-line Republican lawmakers cannot be underestimated.
Furthermore, Speaker McCarthy is prioritizing the passing of four bills, including defense and homeland security, out of the total 12 appropriations bills. Predictions from Politico, an American political media outlet, suggest that while the Republican Party may begin debating these bills on the 26th and possibly pass some, it will not be enough to prevent the impending shutdown from commencing on the 1st of next month.
In the event of a shutdown, the US federal government will be unable to spend the majority of its budget, resulting in hundreds of thousands of people, including civil servants, not receiving their salaries. Essential sector workers will continue to work without pay, while others will be placed on leave. The vacuum in federal government operations, particularly in education, healthcare, and transportation, will inevitably have significant consequences. Additionally, the White House has already instructed federal government entities to prepare emergency shutdown plans. Experts predict that the US economy could lose $6 billion per week if a shutdown occurs, with Goldman Sachs forecasting a decline of more than 1 percentage point in the fourth-quarter economic growth rate if the shutdown coincides with the ongoing auto union strike.
By Jeong In-seol, Washington Correspondent
International
Entered 2023.09.24 14:19 Modified 2023.09.24 14:41
Kevin McCarthy, Speaker of the House of Representatives, Republican Party of the United States. / Photo = AFP As the US Congress delays processing the budget for the next fiscal year, concerns are growing about a shutdown that will paralyze the US federal government starting next month. US media reports that while it is possible to put out the emergency fire by passing a temporary budget bill, this is unlikely due to opposition from hard-line Republican lawmakers who dominate the House of Representatives.
The Financial Times (FT) reported on the 23rd (local time) that it is very likely that the US government will start shutting down from the 1st of next month as it will be difficult for the US Congress to pass the budget for the financial year 2024 by the end of this month. To avoid a shutdown, the US Congress must pass 12 federal appropriations bills by the 30th. However, to date, no appropriations bill has been passed in the Senedd and the House of Representatives. If this happens, most of the work of the federal government, with the exception of essential functions such as defense and national security, will be suspended.
Republican House Speaker Kevin McCarthy proposed a temporary budget plan containing $1.471 trillion (about 1,965 trillion won) to be spent by the end of next month to avoid a shutdown. A budget to strengthen border controls was also included to gain support from hard-line Republican lawmakers. At the same time, some of the welfare budget requested by the Democratic Party, which is the majority party in the Senedd, was also included.
However, hard workers are threatening to remove Speaker McCarthy from his position if he reaches a bipartisan deal or cooperates with the Democratic Party. At the moment, the House of Representatives contains 222 Republican seats and 212 Democratic seats, not including one vacant seat. Therefore, if four or more Republicans vote to leave, the bill cannot be passed. For this reason, we cannot ignore about 10 hard-line Republican lawmakers.
Aside from the temporary budget, Speaker McCarthy is trying to pass four bills first, including defense and homeland security, among the 12 appropriations bills. Politico, an American political media outlet, predicted, “The Republican Party will begin debating four bills starting on the 26th and may be able to pass at least some bills, but it will not be possible to avoid the shutdown that will begin on the 1st. next month.”
If there is a shutdown, the US federal government will not be able to spend most of its budget, and hundreds of thousands of people, including civil servants, will not receive their salaries. Public servants in essential sectors will work without pay, and other workers will be put on leave. A vacuum in the work of the federal government, especially in education, health care and transport, is inevitable. The White House has already ordered the federal government and related agencies to prepare emergency shutdown plans. Ernst Young economist Gregory Daco predicted that “if a shutdown happens, the US economy will lose $6 billion a week.” Goldman Sachs predicted that if the shutdown and the auto union strike continue, the US economic growth rate in the fourth quarter will fall by more than 1 percentage point.
Washington = Correspondent Jeong In-seol surisuri@hankyung.com
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