US again faces shutdown threat with days until deadline

The threat of a US government shutdown has become common in a divided Washington. The clock is again ticking for Congress to pass a short-term government funding measure to stave off a shutdown of large portions of the federal government.
Speaker Mike Johnson, who leads the majority Republican Party in the House of Representatives, is struggling to gain party consensus between the far-right faction aligned with former president Donald Trump, and moderates opposed to their demands in a funding bill.
The divide centres on Mr Trump’s insistence on including legislation that intensifies voter identification restrictions, and other proposed Republican cuts to veterans’ benefits and limits on funding to the Pentagon.
The minority Democratic Party, meanwhile, is urging those moderate Republicans to collaborate on a bi-partisan funding plan that addresses other concerns including cuts to social security and disaster relief.
“This should not be that complicated, and we need to get this resolved within this calendar year,” said Democratic minority leader Hakeem Jeffries.
Mr Johnson, walking a tightrope with a divided Republican Party and a thin majority in the House, is meanwhile insisting that he believes Congress “will get there” and achieve a short-term spending deal.
“We’re in the consensus-building business here in Congress,” he told reporters on Wednesday.
Should Congress fail to fund the government, federal agencies will be required to halt all non-essential operations. Essential functions will continue. This will affect a range of activities, from national parks to passport applications.
Some federal employees will also be told to not report to work. More than 800,000 federal employees were furloughed during the 2013 shutdown, as explained by the Office of Management and Budget. The furloughs would lead to prolonged waiting times on passport applications and small business loans.
Most federal buildings and attractions – such as the Smithsonian museums in Washington – would be closed. National parks would be open, but travelling to one would come with an increased risk as the National Park Service would not be able to maintain visitor centres, rest rooms and roads.
The White House also said a shutdown would put at risk nutritional assistance for 7 million people who rely on food programmes.
“With less than one week before the end of the fiscal year, extreme House Republicans are playing partisan games with peoples’ lives and marching our country towards a government shutdown that would have damaging impacts across the country,” the White House said.
A shutdown could also affect the US economy and the nation’s credit rating, which has already taken a hit after the debt-ceiling stand-off earlier this year.
“A shutdown would be credit-negative for the US sovereign,” credit ratings agency Moody’s wrote in a note to clients.
But the overall economic effect of a government shutdown is marginal compared to what Congress faced with the debt-ceiling crisis.
“However, compared to the debt limit, the less severe economic effect of a shutdown also makes it more likely that Congress fails to act in time,” Goldman Sachs’s chief US political economist Alec Phillips wrote in the firm’s report on the issue.
A government-wide shutdown would reduce economic growth by about 0.15 percentage points for each week it lasts, Goldman Sachs says.
The federal government has shut down 21 times over the past five decades. The most recent shutdown was also the longest.
From December 2018 to January 2019, former president Donald Trump forced a government shutdown to receive funding for the US-Mexico border wall. That ended after 35 days without any such funding.
It was one of three shutdowns to have happened during Mr Trump’s term. The first lasted for three days, and the second only for a few hours.
Mr Trump has pushed Republicans to force a shutdown this year to interfere with the work of two federal cases against him, although criminal prosecutions will continue even if the government shuts down.