Shutdown imminent as House, Senate hold split courses US government funding

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WASHINGTON (Reuters) – The U.S. government looked all but certain to enter a partial shutdown on Sunday as House Republicans and Senate Democrats held to starkly different courses on funding.

The Democratic-majority Senate planned another procedural vote on a stopgap bill to fund the government through Nov. 17, which has been moving forward with broad bipartisan support, which the Republican-controlled House of Representatives has rejected so far.

House Republican lawmakers on Friday blocked their own party’s stopgap bill, known as a “continuing resolution” or CR. That bill included multiple conservative policy additions that Democrats opposed, and had no chance of winning the Senate support it would need to become law.

Infighting among Republicans who control the House by a 221-212 margin has pushed the United States to the brink of its fourth partial shutdown in a decade, as the chamber has been unable to pass legislation that would keep the government open beyond the Oct. 1 start of the fiscal year.

Hundreds of thousands of federal employees will lack the funding to do their jobs if the two chambers do not send a spending bill for Democratic President Joe Biden to sign into law by 12:01 a.m. (0401 GMT) on Sunday.

Federal agencies have already drawn up detailed plans that spell out what services must continue, like airport screening and border patrols, and what must shut down, like scientific research and nutrition aid to 7 million poor mothers.

Most of the government’s 4 million-plus employees would not get paid, whether they were working or not.

House Republicans emerging from a closed-door party meeting on Saturday said they expected to vote for a measures that would ensure that members of the military, border security and the Federal Aviation Administration were paid during the shutdown. Those would only take effect if the Senate passed it and Biden signed it into law.

“We will vote to keep our troops paid and fully operational,” said Representative Darrell Issa.

Some hardline Republicans said a shutdown was worth it to achieve their goals.

“I fear the majority of the conference is willing to do anything to avoid the discomfort of a potential government shutdown,” Representative Bob Good told reporters. “If we don’t have the willingness to say ‘no’ and the resolve to say ‘no,’ the Senate and the White House will not accept any spending cuts.”

CREDIT CONCERNS

The standoff comes just months after Congress brought the federal government to the brink of defaulting on its $31.4 trillion debt. The drama has raised worries on Wall Street, where the Moody’s (NYSE:MCO) ratings agency has warned it could damage U.S. creditworthiness.

Congress typically passes stopgap spending bills to buy more time to negotiate the detailed legislation that sets funding for federal programs.

This year, a group of Republicans has blocked action in the House as they have pressed to tighten immigration and cut spending below levels agreed to in the debt-ceiling standoff last spring.

On Friday, 21 Republicans joined with Democrats to defeat legislation that reflected those demands, saying the chamber should focus instead on passing detailed spending bills for the full fiscal year, even if it leads to a shutdown in the near term.

That angered other Republicans, who said they had blown an opportunity to advance conservative policies.

“There’s a lot of frustration growing with the 21 individuals who chose to vote ‘no’ on what was a very good plan,” Republican Representative Nicole Malliotakis of New York said on Friday.

Republican House Speaker Kevin McCarthy said on Friday the chamber might try to rely on Democrats to help pass a stopgap bill that would continue funding at current levels, even though that could prompt a challenge to his leadership from hardliners.

The Senate is due to hold a procedural vote at 1:00 p.m. (1700 GMT) to extend government funding through Nov. 17. It enjoys wide support from Republicans and Democrats, but the chamber’s arcane rules mean that a vote on final passage could be delayed until Tuesday.

Even if that passes, the two chambers would have to resolve their differences before sending any bill to Biden’s desk. That could pose another hurdle, as McCarthy said he opposed $6 billion in Ukraine aid included in the Senate bill.

“We continue to try to find a way out of this,” he said on Friday.