The US government threatens the "shutdown"

In the US, the danger of a partial standstill in government business is approaching from the end of the week. In a formal vote in the US Senate on Monday evening, the Republicans blocked a proposal to secure government funding beyond the end of the fiscal year this Thursday.

The US government threatens the "shutdown"

The new financial year starts on October 1st, this Friday. If no budget regulation has been decided by then, parts of the government will be shut down. US President Joe Biden absolutely wants to avoid that. But there is even greater harm looming: a potential government default in October. In addition, Biden is fighting for the implementation of two huge investment packages - here, too, this week should decide on the success or failure of the president.

The Republicans are blocking themselves

"Shutdowns" by parts of the government occur more often in the USA. This means that some state employees would have to be given compulsory leave or work temporarily without pay. Depending on the length, certain government services could be restricted or payments could be delayed. In the past, such “shutdowns” only lasted a few days or hours, so the consequences are limited - or weeks, which can lead to major disruptions.

The House of Representatives passed the government's temporary funding scheme last week with the vote of the Democrats. In the Senate, however, the Republicans resisted. They complained that the bill also provides for the debt ceiling to be suspended for the time being - which they reject.

Time is running out

The Democrats could possibly try to get this through in Congress on their own, although these are usually bipartisan decisions. And they could potentially propose a proposal to temporarily fund the government without changing the debt ceiling, and at least get Republicans on board at that point. In any case, time is of the essence.

In addition, Biden is currently fighting to push through two central projects of his tenure in Congress: a large-scale package for investments in the country's infrastructure and a second huge package for social investments. Both projects are still shaky in the face of internal discussions among the Democrats. Decisions are also expected on this in the current week.

According to Pelosi, the House of Representatives should vote on the infrastructure package on Thursday. The package, with which roads, bridges and other transport and energy networks in the USA are to be modernized, passed the Senate in August after long negotiations - with the support of Republicans. The final vote of the other Congress Chamber is still missing. Around 550 billion US dollars of new investments in infrastructure are planned over the next few years. In total, including previously budgeted funds, the package is worth more than a trillion dollars.

The second package provides for a significant expansion of social benefits. Biden wants, for example, to invest more in education and childcare, to give families more support and tax relief, and to take money into the fight against the climate crisis. This package is worth $ 3.5 trillion, also spread over several years. It is to be financed through tax increases for top earners and the more consistent collection of due taxes.