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US government shutdown imminent after Republicans rejection of funding bill

US House Speaker Kevin McCarthy (R-CA) speaks with reporters about the imminent US government shutdown at the Capitol in Washington, US, September 29, 2023. (Photo by Reuters)

US Republican lawmakers have rejected a stopgap bill proposed by their leader to temporarily fund the Democratic government, pushing the Biden administration on the verge of shutdown.

In a 232-198 vote on Friday, Republicans in the US House of Representatives rejected the stopgap bill proposed by House Speaker Kevin McCarthy to extend government funding by 30 days in order to reach an agreement on the 2024 fiscal budget and avert the midnight shutdown at 12:01 am ET (0401 GMT) on Sunday.

After the bill failed to gain the necessary vote, McCarthy, who is the majority leader of the House, told reporters at a press briefing on Friday that the budget negotiations will continue until the disputing sides reach an agreement on the 2024 budget. “It’s only a failure if you quit.”

In the meantime, US President Joe Biden warned that a shutdown could take a heavy toll on American troops.

“We can’t be playing politics while our troops stand in the breach. It’s an absolute dereliction of duty,” Biden said at the retirement ceremony of Mark Milley, one of America's top generals who played a leading role in the US-led proxy war by Ukraine against Russia.

He also warned that the shutdown would hit Black Americans disproportionately worse, including by reducing nutritional benefits, cutting inspections of hazardous waste sites, and lack of enforcement of fair housing laws.

US Treasury Secretary Janet Yellen warned once more on Friday that a government shutdown would do damage and “undermine” the US economy. Lawmakers, however, remain divided over the issue.

“There are members who don’t care whether the government stays open or it shuts down,” Republican Representative Kat Cammack told reporters. “The ones that I believe are OK with a shutdown have never been through a shutdown.”

“What does work is rolling up our sleeves and getting onto these single subject bills and moving them,” Representative Matt Gaetz said on a podcast after voting against the stopgap bill on Friday.

Other Republicans said they would probably have to work with Democrats to pass a stopgap bill that could win approval in the Senate and from Biden. “Some people are missing the obvious,” said Republican Representative Don Bacon.

McCarthy and Biden had agreed in June to a deal that would have set agency spending at $1.59tn in fiscal 2024, but hardline Republicans in the House have disputed their leaders' deal with the president, threatening to topple McCarthy if he remains in compliance with Biden. Hardliners demand a slashing  2024 fiscal budget by $120bn.

The government budget vote in the US Congress regularly turns into a standoff between the two main American parties, with each camp using the threat of a shutdown to obtain concessions from the other -- until a solution is usually found at the last minute.

If the shutdown takes place, it would be the fourth in a decade and just four months after a similar standoff brought the federal government within days of defaulting on its $31 trillion debt.

Repeated disputes among US lawmakers in Congress have raised worries on Wall Street, where top rating agencies, Moody’s and Fitch, have warned that the imminent government shutdown would do damage to US credibility.

US economists, analysts, and government experts predict that everything from childcare funding and economic data releases to food benefits may be suspended beginning on Sunday, and some 2.2mn government workers may be furloughed or forced to work without pay.

The US Census Bureau reckons out of the 333mn US population, about 41mn people live at or below the poverty line, which is set at close to $30k for a 4-member family household.


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