The U.S. government has escaped a "shutdown," but a bigger crisis lies ahead
On September 30, local time, at the last moment of the end of the current fiscal year of the US federal government, the two houses of the US Congress finally passed a short-term spending bill to fund the US government until November 17, thus avoiding the "shutdown" of the government.
The original intention of the US Congress to control the "money bags" was to limit the arbitrary spending of government departments, but now it has become a "bargaining chip" for the two parties to grab political interests.
The United States is heading for a "dangerous situation," and behind what seems to be temporarily avoiding one crisis is another looming.
Infographic: U.S. Capitol. Photo by China News Agency reporter Chen Mengtong
"A man-made crisis"
The U.S. government avoided the shutdown
On the evening of September 30, local time, the House of Representatives and the Senate of the US Congress voted to pass a short-term spending bill and sent it to President Biden for signature, thereby avoiding the government's "shutdown".
The Short-Term Spending Act provides the federal government with 45 days of short-term spending. The bill added last-minute funding for natural disaster relief requested by the White House, but did not include additional assistance to Ukraine and enhanced border security.
In response, Biden said in a statement, "Tonight, the bipartisan majority in the Senate and House of Representatives voted to keep the government running, avoiding an unnecessary crisis and unnecessary suffering for millions of hard-working Americans." ”
But he also criticized it as an "artificial crisis" that could have been avoided a few months ago.
In general, the U.S. federal government is functioning normally, and the required funds are authorized by appropriations bills every fiscal year. If Congress fails to pass the bill, government spending will be blocked and some functions will have to be shut down. The knock-on effect of the shutdown also jeopardizes industries: more than 4 million U.S. military and government workers will not be able to receive their salaries, and two-thirds of the tax office employees may be forced to furlough.
Infographic: US President Joe Biden. Image source: Visual China
The two parties are constantly fighting
The "shutdown" crisis may play out again in November
Recently, the two parties in the United States have been fighting over the appropriation bill for the new fiscal year, and have reached a stalemate several times, which has triggered the "shutdown" crisis. Specific differences include the size of the budget for the next 12 months, continued assistance to Ukraine, and immigration controls at the U.S.-Mexico border.
What is even more difficult is that not only the Democratic Party and the Republican Party have serious differences, it is difficult to cooperate, but the Republican Party has also "become a mess of porridge."
Republican hardline conservatives are demanding that the government's discretionary spending cap for fiscal year 2024 be cut by another $120 billion on top of the $1.59 trillion negotiated between House Speaker McCarthy and President Joe Biden. On September 29, the Republican-dominated House of Representatives even thwarted McCarthy's proposed temporary appropriations bill, bringing the government "shutdown" close again and again.
Now, despite the approval of the latest short-term spending bill pushed by McCarthy in Congress, the AP believes that the "shutdown" crisis has only been "temporarily" alleviated.
In order to get the short-term spending bill approved, Republican McCarthy was forced to rely on Democrats, abandoning the Republican hardline conservatives. That means he is likely to face a motion to remove the speaker of the House of Representatives next.
NBC also commented that the US Congress must resolve its differences by November 17, but it is not clear whether they will do so. "We are likely to be in this situation again in November."
Infographic: U.S. House Speaker McCarthy. Photo by China News Agency reporter Sha Hanting
Full of political calculations,
U.S. goes to "dangerous situation"
This is not the first time the US government has faced a "shutdown" crisis. Since 1976, the U.S. government has had 21 "shutdowns" due to funding gaps, including 10 "shutdowns" that have forced government employees to take unpaid leave since 1980.
The longest occurred in 2018-2019, when then-President Donald Trump and congressional Democrats were at a standoff over building a border wall, resulting in a government budget that could not be passed. That partial government shutdown lasted 35 days throughout the holiday season.
Senate Majority Leader Democrat Schumer pointed out in September that if the government "shuts down," it will be the fault of the House Republicans' "political game."
"The only way the Budget can be passed is bipartisanship... A single party cannot do the job, especially if it is controlled by a small extremist group of 30 to 40 people. ”
House Republicans took aim at America's high debt and blamed Democrats. Senator John Kennedy, Republican of Louisiana, said, "Democrats know spending and debt accumulation are out of control, but they still refuse to consider Republican proposals." ”
Reuters commented that the differences between the Senate and the House of Representatives are difficult to bridge, and this "partisan deadlock mode" has repeatedly pushed the United States to dangerous situations and is constantly damaging the credibility of the United States.
Bloomberg economists believe that once the government shutdown is prolonged, the Republican Party will be blamed, which is beneficial to Biden's re-election. However, if Democrats agree to Republican hardliners' demands for deep cuts in federal spending, it will have an impact on the economy in 2024, and the ruling Democratic Party will then be the target of voters' blame.
Infographic: On January 22, 2019, local time, employees of the Transportation Security Administration (TSA) in Brooklyn, New York, USA, received free food at the Barclays Center. The New York Food Bank is distributing food to federal workers affected by the shutdown.
US Treasury Secretary warns!
Another crisis is looming
In fact, the federal government's financial problems go far beyond that. In recent years, the "snowball" of US debt has become bigger and bigger. According to the website of the New York Times on September 18, the total national debt of the United States exceeded $33 trillion for the first time that day, once again ushering in a "dangerous milestone".
U.S. Treasury Secretary Janet Yellen warned on September 29 that the government "shutdown" would cause many businesses and children's programs to be idle, thereby "disrupting" the U.S. economy and possibly delaying the advancement of major infrastructure. Unless Congress raises the debt ceiling, there is a high probability of a "historic financial crisis" and an "economic catastrophe" in the United States.
International rating agency Moody's Investors Service also warned on September 25 that the "shutdown" of the US federal government will have a negative impact on US credit ratings. Previously, international rating agency Fitch downgraded the US long-term foreign currency issuer default rating to AA+ from AAA.
Larry Fink, president of BlackRock, a world-renowned fund management company, criticized American politicians for allowing the government to shut down, which is "ridiculous" and "irrational", undermining the position of the United States in the eyes of investors.
The US "New Republic" weekly said that US politicians use the debt ceiling as a political stick, and the global economy as collateral, this "stupid game" may mess up the global economy. (End)