United States | Government shutdown narrowly avoided

Against all expectations, the American Congress reached a last-minute agreement on Saturday on the financing of the federal administration, avoiding the closure of government services. Summary of a crisis narrowly averted… for now.

What is happening in the US Congress?

Every year, it’s the same showdown. Elected Democrats and Republicans must agree on the government’s annual budget before the start of the new budget year.

However, the American Congress had not yet reached an agreement on Saturday evening, just a few hours before the deadline. The impasse appeared to be such that federal employees were warned to prepare for a possible government shutdown.

Then, against all expectations, a compromise was found. At the last minute, the Senate passed a measure to keep the government funded for 45 days, following the House of Representatives’ lead.

The resolution notably provides for disaster relief funds, but no aid to Ukraine, which was nevertheless a priority of the White House.

In a statement following the vote, United States President Joe Biden welcomed the agreement, denouncing “extremist Republicans in the House of Representatives” who were “demanding drastic budget cuts.”

“Under no circumstances can we allow American support for Ukraine to be interrupted,” he said.

So the crisis was averted?

For now yes. But this is only a reprieve. Starting this Sunday, elected officials have six weeks to agree on a new plan. “We are going to relaunch a cycle of negotiations,” notes Amélie Escobar, associate member of the Observatory on the United States of the Raoul-Dandurand Chair.

In the absence of an agreement, millions of civil servants and soldiers would find themselves deprived of wages. Overnight, federal agencies should stop all non-essential work. Air traffic would be disrupted, national parks would close their doors to visitors, funding for social programs would be suspended, not to mention the impact on financial markets.

According to Goldman Sachs, the shutdown of government services would reduce the country’s economic growth by 0.2% for each week it lasts.

By comparison, the longest period of fiscal paralysis in the United States lasted 35 days under the presidency of Donald Trump. According to some estimates, the impasse cost the government more than $5 billion.

What will be the main points of dispute over the coming weeks?

Military and humanitarian aid to Ukraine will be at the heart of the negotiations. Democrats made it one of their priorities, initially demanding $24 billion in aid for Kyiv. However, more and more Republican elected officials are opposed to it.

“When the conflict began, it was almost unanimous in both chambers, but the more time passes, the more support for military aid fades on the Republican side,” observes Rafaël Jacob, researcher at the Raoul Chair -Dandurand.

We should still expect Democrats to fight in the coming weeks to maintain financial aid to Ukraine. “There are commitments that have been made. At the same time, they will probably have to make concessions on the amount they wanted to give,” remarks Amélie Escobar in turn.

Could the adopted agreement cost Kevin McCarthy his position as Speaker of the House of Representatives?

At least that’s what some far-right elected officials believe, who accuse him of having negotiated with the Democrats. While they are expected to file a motion to try to impeach Mr. McCarthy, it is not certain that they will obtain the support necessary to force the Speaker of the House from his chair without the support of Democrats .

“Democrats will have a choice to make, either oust him and potentially end up with someone who is less inclined to work with them, or support him knowing that he still launched an impeachment inquiry against Joe Biden,” M rating^me Escobar.

Before the vote, the Speaker of the House defended himself by saying that he was behaving “like an adult”. “We’re going to do our job. We will not shut down the government,” he said.

Will this have an impact on the 2024 presidential election?

It would be surprising, believes Rafael Jacob. “It’s such a structural dysfunction that it’s not attributable to a president or a party,” he explains. Since the beginning of the 21st century^e century, the American Congress struggles to adopt annual budgets, resorting to temporary measures lasting a few months, or even a few weeks.

“We have had Democratic and Republican presidents, Congresses controlled by Republicans and Democrats. Year after year, it’s always the same dynamic. I think the problem is much more fundamental than that,” he concludes.