With shutdown looming, US Senate offers short-term budget fix

The US Senate drafted a last-ditch short-term budget proposal Tuesday as time was running out for Congress to avoid a partial government shutdown, though the odds of it passing the House remained slim.

With just days left before the September 30 deadline, both Democratic Senate Majority leader Chuck Schumer and Republican minority leader Mitch McConnell endorsed the draft, which would keep the government open until November 17.

But there was no immediate indication that the warring factions of House Republicans, who have forced the showdown over government funding, would take it up if passed in the Senate.

"Shutting the government down over a domestic budget dispute doesn't strengthen anyone’s political position," McConnell said.

"It just puts important progress on ice. And it leaves millions of Americans on edge," he said.

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The White House joined McConnell in pushing for Congress to adopt the Senate package, with President Joe Biden, speaking at a campaign event Tuesday evening, saying that "it's time for Republicans in the House of Representatives to start doing their job."

Frozen services, no paychecks

If a deal isn't reached by Saturday, hundreds of thousands of federal employees could be furloughed, curtailing a wide swath of government services.

That could mean welfare recipients don't get payments they depend on, and airport operations could slow, snarling travel plans for millions.

Some employees would continue to work -- like the military and others deemed essential -- but would not get their paychecks, until a budget is finally passed.

Biden placed the blame on a small group of "extremist" Republican lawmakers.

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The House hardliners "are determined to shut down the government," Biden said in an earlier video message.

Meanwhile the Republican mainstream "refuse... to stand up to the extremists in their party," Biden said.

"So now everyone in America could be forced to pay the price," he said.

Ukraine aid on the chopping block

The Senate draft confirmed that Ukraine, which has been battling Russian invaders for more than a year and a half, could find its lifeline of US arms and economic aid under threat.

Last week Ukrainian President Volodymyr Zelensky visited Capitol Hill to try to convince the slowly growing number of skeptical Republican members of Congress not to give up on his country.

But after Biden asked Congress for $24 billion for Kyiv, the short-term Senate measure released Tuesday allocated just $6.1 billion.

Hardliners in the House have said they don't want any more money going to Kyiv, after the $110 billion already provided since the invasion began in February 2022.

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"They're picking Ukraine over Americans," House Speaker Kevin McCarthy said late Tuesday night.

Instead, he and other Republicans pressed for more border funding to combat undocumented immigration.

"If they want to focus on Ukraine and not on the Southern border, then their priorities are backwards."

Markets sink without a deal

Even if the Senate passes the measure quickly, there were doubts that the House could act quickly enough to avoid at least a short shutdown.

The prospect of the world's largest economy unable to produce a government budget comes just four months after Washington came dangerously close to defaulting on its debt due to political deadlock.

That could have had disastrous consequences for the American economy and beyond.

US stock markets sank more than one percent on Tuesday amid the prospect for a government shutdown.

On Monday, Moody's -- the only major ratings agency to maintain its maximum score for US sovereign debt -- warned that the latest drama could threaten its top-tier status.

Source: AFP