The U.S. Senate and House of Representatives are at odds over a bipartisan bill to prevent a government shutdown. The Senate voted to begin debate on a measure that would fund the government through Nov. 17 and provide funding for domestic disaster responses and aid for Ukraine. However, the Republican-controlled House plans to push its own partisan bill, which is unlikely to gain support in the Democratic-majority Senate. This divide suggests that the federal government is likely to experience its fourth shutdown in a decade, which is concerning for Wall Street. Senate leaders from both parties worked together to pass a short-term extension of federal funding, but House Speaker Kevin McCarthy intends to attach tough border and immigration restrictions that are unlikely to gain enough support to become law. President Joe Biden and McCarthy had previously agreed on discretionary spending for the fiscal year, but hardliners within McCarthy’s party have rejected the deal. McCarthy’s bill includes funding for the U.S.-Mexico border wall and stricter immigration policies, which critics argue would effectively end U.S. asylum for immigrants. Both McConnell and McCarthy have called for a resolution to avoid a government shutdown, emphasizing the negative consequences of such an event. If an agreement is not reached, hundreds of thousands of federal workers will be furloughed, and various services will be suspended. The potential shutdown has raised concerns at credit rating agency Moody’s, although its impact on the U.S. economy remains uncertain. The situation is also influencing the 2024 presidential election, with former President Donald Trump supporting the idea of a shutdown. The proposed cuts by hardliners represent only a fraction of the total U.S. budget, and lawmakers are not considering reductions to popular benefit programs like Social Security and Medicare. Biden has called on House Republicans to honor their agreement with McCarthy, but McCarthy has scheduled a vote on spending bills that reflect conservative priorities and are unlikely to become law. The outcome of this vote could complicate efforts to pass a stopgap spending bill and avoid a shutdown. Congress has experienced 14 government shutdowns since 1981, although most have been short-lived.
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