US government hours from shutdown, funding chaos
If lawmakers do not reach an agreement, the shutdown of all non-essential government services, scheduled to commence after midnight on Saturday (0400 GMT Sunday), would mark the first such closure since 2019.
On Saturday, the United States government was perilously close to a shutdown as the far-right faction of the Republican Party thwarted last-minute efforts to reach a temporary budget agreement. This uncertainty cast doubt over various aspects, including access to national parks and Washington's substantial support for Ukraine.
If lawmakers fail to strike a deal, the closure of non-essential government services was set to commence after midnight on Saturday (0400 GMT Sunday). This would mark the first government shutdown since 2019, immediately causing delays in the payment of salaries for millions of federal employees and military personnel.
Congress finds itself deadlocked, with a small group of House of Representatives Republicans resisting stopgap measures to keep essential functions running. On Friday, House Republicans rejected a plan put forth by their leader, Speaker Kevin McCarthy, further exacerbating the growing turmoil within the party as they approach the 2024 elections, where the hard-right former President Donald Trump seeks a return to the White House.
Shalanda Young, Director of the White House Office of Management and Budget, expressed that there was still a chance to avert a shutdown if Republicans could resolve their internal divisions.
White House Press Secretary Karine Jean-Pierre emphasized that President Joe Biden, who is seeking a second term in 2024, did not intend to intervene in the matter, stating that the conversation needed to occur between Speaker McCarthy and his caucus.
In an interview with the news outlet ProPublica on Friday, Biden criticized McCarthy's decisions, stating that he had made "a terrible bargain" and seemed willing to compromise constitutional processes to retain the speakership. However, McCarthy shifted the blame onto Democrats, accusing them of hindering a solution to the ongoing budget crisis.
What about Ukraine?
While all critical government services will remain operational, a potential shutdown would entail the closure of the majority of national parks, including iconic sites such as Yosemite and Yellowstone in the western United States and Florida's Everglades, starting on Sunday.
Additionally, as student loan payments are set to resume in October, officials confirmed that key activities at the Federal Student Aid office would continue for a few more weeks. However, an extended shutdown could lead to more significant disruptions.
White House National Economic Council Director Lael Brainard cautioned that a shutdown "unnecessarily" puts the world's largest economy at risk. Potential risks could include air travel delays, as air traffic controllers might be asked to work without receiving their paychecks. Treasury Secretary Janet Yellen also warned that a shutdown could hinder infrastructure improvement projects.
A report released by the Center for Strategic and International Studies, a think tank, stated that in the short term, a government shutdown would reduce GDP by 0.2 percentage points each week if it persists. Furthermore, it highlighted that interrupting critical trade functions could undermine the United States' credibility as a commercial partner, disrupt ongoing negotiations, and impede export control enforcement capabilities.
The ongoing budget turmoil casts a growing shadow over Biden's policy of providing support to Ukraine.
For Republican hardliners responsible for derailing the new budget, halting aid to Ukraine is a key objective. While most Republican members of Congress still endorse US support for Ukraine, the shutdown raises questions about the political feasibility of renewing the multibillion-dollar flow of assistance.