US Government Shutdown: Republicans Reject Own Bill To Extend Funding By 30 Days

On September 29, there were indications that a partial shutdown of federal agencies in the United States is likely to occur starting on October 1, following actions by hardline Republicans in the U.S. House of Representatives. The House voted 232-198 against a measure proposing a 30-day extension of government funding, which would have prevented a shutdown. The bill, featuring spending cuts and immigration restrictions, aligned with Republican priorities but faced slim chances of passing in the Democratic-controlled Senate. With Republicans holding a 221-212 majority in the House, there is now a lack of a clear strategy to prevent a shutdown, which could affect national parks, disrupt pay for approximately 4 million federal workers, and hinder activities ranging from financial oversight to scientific research if funding is not extended beyond 12:01 a.m. ET on Sunday.

US Government Shutdown

Following the vote, House Speaker Kevin McCarthy hinted at the possibility of the chamber approving a funding extension, but specific details about the subsequent course of action were not provided. The House is expected to conduct further votes on Saturday. The response from the Senate remains uncertain. While the chamber was set to consider a bipartisan bill on Saturday afternoon to fund the government until Nov. 17, procedural challenges could delay a final vote until Tuesday. U.S. Treasury Secretary Janet Yellen emphasized on Friday that a government shutdown could “undermine” economic progress in the U.S. by halting programs for small businesses and children and potentially delaying significant infrastructure improvements.

In the final analysis, 21 hardline House Republicans aligned with Democrats to thwart the funding extension measure. Republican Representative Kat Cammack shared her perspective, stating, “There are members who don’t care whether the government stays open or it shuts down.” She added, “The ones that I believe are OK with a shutdown have never been through a shutdown.” This underscores a division among House Republicans regarding their views on the potential repercussions of a government shutdown. Those resisting the short-term funding measures contend that Congress should concentrate on crafting detailed spending bills to cover the entire fiscal year, even if this stance results in a government shutdown. Despite the House’s passage of four full-year bills, the likelihood of gaining Senate approval remains slim. The divide among lawmakers reflects varying perspectives on the most prudent and effective approach to government funding, attempting to steer clear of a shutdown.

A prospective government shutdown would represent the fourth incident in the past decade, occurring a mere four months after a similar standoff that brought the federal government perilously close to defaulting on its $31 trillion debt. This repetitive pattern of brinkmanship has stirred concerns on Wall Street, with Moody’s rating agency cautioning that these situations could undermine the creditworthiness of the United States. The recurrence of uncertainties related to government funding and the potential economic consequences has contributed to apprehensions and unease in financial markets.