WASHINGTON: Millions of Americans braced Monday for pay and welfare checks to stop within days as Congress careened toward a damaging government shutdown, with Republican right wingers blocking attempts to pass a budget. Four months after barely avoiding the more serious prospect of a credit default, the world’s largest economy is once again on the verge of a convulsion, with the lights due to go out at the weekend. Republicans leading the House of Representatives—hamstrung by hardline rebels demanding deep spending cuts—have been unable to pass the usual series of bills setting out departmental budgets for the next financial year, which begins on Sunday.

The party’s leadership does not even have the votes to advance a short-term funding bill at 2023 spending levels—known as a continuing resolution—to keep the government open past midnight on Saturday. A shutdown would put at risk the finances of workers at national parks, museums and other sites operating on federal funding, but it could also carry significant political risk for President Joe Biden as he runs for re-election in 2024. “Funding the government is one of the most basic, fundamental responsibilities of the Congress,” the Democrat told reporters at the White House.

“And if Republicans in the House don’t start doing their job we should stop electing them.” The Biden administration also warned that seven million people who rely on the food aid program for women and children could also see their money stopped. The funding deadlock arose after House Republicans refused to support the government spending levels agreed between Biden and Speaker Kevin McCarthy, the top Republican in Congress that would keep government gears turning. “UNLESS YOU GET EVERYTHING, SHUT IT DOWN!,” former president Donald Trump demanded in a post on his Truth Social platform late Sunday as he led calls for the Republican hardliners to dig in.


The budget vote in Congress regularly turns into a standoff, with one party using the prospect of a shutdown to seek concessions from the other, usually without success. Trump, who is also running for re-election, forced a 35-day shutdown over border controls in 2018 but ended up reopening the government after failing to secure a single concession from Democrats. The impasse is invariably resolved before the standoffs become crises but this year the showdown is exacerbated by new levels of polarization on Capitol Hill.

In the Senate, debate is led by two political heavyweights, Democratic majority leader Chuck Schumer and Mitch McConnell, his Republican counterpart. Congress was out Monday but Schumer has been paving the way for a continuing resolution, including Ukraine aid, in talks with McConnell and the White House. A measure that would keep the government open through early December has support on both sides of the Senate—but would likely not be ready for a vote before the shutdown and would not have the support of the Republican right.

Meanwhile, the Moody's ratings agency has warned that a US government shutdown this weekend, amid political deadlock in Congress, would have negative implications for the country's top tier credit rating. "A shutdown would be credit negative for the US sovereign," Moody's Investors Service wrote in a note to clients on Monday. The warning from Moody's -- the only major agency to maintain its rating for US sovereign debt at its highest level -- underscores the potential economic danger to the United States of failing to reach an agreement to keep the government funded before the end of the month.

Fitch and S&P have both downgraded US debt in recent years, raising the risk associated with the debt -- and the cost of government borrowing. A shutdown "would underscore the weakness of US institutional and governance strength relative to other AAA-rated sovereigns," Moody's wrote. "Further, a prolonged shutdown would be disruptive to the US economy and financial markets, with potential negative ramifications for the sovereign's debt affordability," it added. – Agencies