U.S. House of Representatives Republicans are planning to release a stopgap measure to prevent a partial government shutdown following the downgrade of the government’s credit ratings by Moody’s. The release of the continuing resolution, or “CR,” is still uncertain, and its form is yet to be determined.
U.S. House Speaker Mike Johnson has been engaged in discussions with members of the Republican majority about various CR options. Both the Republican-controlled House and the Democratic-led Senate need to agree on a solution that President Joe Biden can sign into law before the current funding expires on November 17.
Moody’s decision to lower the credit outlook was influenced by political polarization in Congress. The agency expressed concerns that Washington may struggle to reach an agreement to address its growing deficits and make them more manageable.
Last year, the U.S. recorded a $1.7 trillion deficit, the largest since the peak of the COVID-19 pandemic. With rising interest rates, the cost of servicing the debt will continue to rise.
Just a few months ago, Congress came close to defaulting on the U.S. debt, which would have had severe consequences for global financial markets.
As the potential shutdown looms, some Republicans are advocating for a “clean” CR that would extend until mid-January without any spending cuts or conservative policy riders that Democrats oppose.
However, hardline conservatives are pushing for a measure that includes spending cuts, tighter security at the U.S.-Mexico border, and an unconventional structure with staggered deadlines for different segments of the federal budget.
Many lawmakers warn that a prolonged partisan dispute over a stopgap measure could hinder Congress from averting a shutdown.
While House Republicans consider their options, Senate Majority Leader Chuck Schumer has taken an initial procedural step to advance his own stopgap measure.
Reporting by David Morgan; Editing by Daniel Wallis and Grant McCool
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