On Saturday, the potential shutdown of the US government was looming as a result of opposition from the far-right faction within the Republican Party, which obstructed the final attempts to reach a temporary budget agreement. This development has cast doubt on various aspects, ranging from access to national parks to Washington’s substantial support for Ukraine. If lawmakers fail to reach an agreement, the shutdown, which is set to commence after midnight on Saturday (0400 GMT Sunday), would be the first since 2019. This would immediately impact the salaries of millions of federal employees and military personnel.
The deadlock between the two chambers of Congress continues, primarily due to a small group of Republicans in the House of Representatives resisting stopgap measures that would temporarily maintain government operations. On Friday, House Republicans rejected a proposal put forth by their own leader, Speaker Kevin McCarthy, further exacerbating the sense of turmoil within the party in the lead-up to the 2024 elections, where former President Donald Trump, aligned with the hard-right, hopes to return to the White House.
Shalanda Young, the director of the White House Office of Management and Budget, expressed cautious optimism about avoiding a shutdown if Republicans could resolve their internal divisions. White House Press Secretary Karine Jean-Pierre clarified that President Joe Biden, who is seeking reelection in 2024, did not intend to intervene and that the resolution should come from Speaker McCarthy and his caucus.
In an interview with ProPublica on Friday, Biden criticized McCarthy’s actions, stating that he had made “a terrible bargain” by prioritizing his speakership over constitutional processes. However, McCarthy shifted blame onto Democrats, accusing them of obstructing a solution.
Critical government services will continue to operate during the potential shutdown, but most national parks, including iconic ones like Yosemite and Yellowstone, would be closed to the public starting Sunday. With student loan payments set to resume in October, key activities at the Federal Student Aid office will continue for a few more weeks. However, a prolonged shutdown could lead to more significant disruptions.
Lael Brainard, the White House National Economic Council Director, warned that a shutdown unnecessarily puts the world’s largest economy at risk, potentially causing problems like air travel delays, as air traffic controllers might have to work without pay. Treasury Secretary Janet Yellen also cautioned that a shutdown could delay infrastructure improvements.
A report released by the Center for Strategic and International Studies on Friday indicated that in the short term, a government shutdown would reduce GDP by 0.2 percentage points each week it lasts. Additionally, it could harm the United States’ credibility as a commercial partner, impede ongoing negotiations, and hinder export control enforcement capabilities.
This political turmoil is casting a shadow over President Biden’s policy of supporting Ukraine in its struggle against the Russian invasion. While most Republican members of Congress still support US backing for Ukraine, the shutdown raises questions about the political feasibility of renewing the multi-billion-dollar assistance to Ukraine, which is a key goal for Republican hardliners responsible for derailing the budget negotiations.