Dramatic twist in the United States, the “shutdown” could ultimately be avoided at the last minute

2023-10-01 03:58:54

Is the threat of a “shutdown” receding? The US House of Representatives adopted an emergency funding measure this Saturday, a key step in pushing back the paralysis of the federal administration a few hours before the outcome.

Every year, the threat of a “shutdown” shakes America. In the absence of agreement on the budget between elected Democrats and Republicans before this Saturday midnight, federal agencies would be obliged to reduce a large part of their activities and force many employees to work without pay. Millions of federal employees whose mission is considered essential will be called to work without being paid.

The twist came after Republican House Speaker Kevin McCarthy earlier proposed a last-ditch attempt to prevent the shutdown, which could only pass with Democratic support. They gave him their support. The text adopted this Saturday (335 yes, 91 no) must now pass to the Senate. It provides for the administration to continue to be funded for 45 days.

Ukraine the big loser?

“I ask Republicans and Democrats to put their political differences aside. Think of the Americans,” urged Kevin McCarthy to the press. His proposal “does not include a budgetary component for Ukraine,” he clarified.

The White House had initially demanded that the finance law passed by elected officials include $24 billion in military and humanitarian aid for kyiv. The budgetary crisis would therefore have direct repercussions on the war in Ukraine.

The release of funding for Ukraine appears increasingly uncertain, given the direction the negotiations are taking behind the scenes. A handful of Trumpist Republican elected officials refuse to release any new aid to kyiv, believing that these funds should be allocated to managing the migration crisis in the United States.

These lieutenants of Donald Trump, who have disproportionate power due to the very thin Republican majority in the House, had already pushed the United States to the brink of the political-financial precipice four months ago on the issue of raising the debt ceiling.

And they received orders from the former president, who could face Joe Biden in 2024, to “paralyze” the federal state unless they win their case on “all” the budget issues under debate.

Each week of shutdown could also cost 0.2 points of growth to US GDP in the 4th quarter, according to a note from economists at Goldman Sachs.

It was under the presidency of Donald Trump that the United States experienced its longest shutdown, during the winter of 2018/2019. According to several estimates, the country’s GDP was then cut by more than 3 billion dollars.