Will the United States be able to pay its civil servants next week? The world's largest economy is once again facing the threat of paralysis of its administration due to a political blockage, four months after coming close to default. The 2024 budget must be adopted by Congress before October 1. But without an agreement between Democrats and Republicans, the federal administration will have to stop certain payments. And the first victims would be the approximately two million federal civil servants who would see their salaries suspended for the duration of the “shutdown”.
Just over a year before the presidential election, in which Democratic President Joe Biden is a candidate, the two parties are at loggerheads. “Funding the state is the most basic and fundamental responsibility of Congress and if the Republicans do not start doing their job, we should stop voting for them,” Joe Biden said on Monday, “they have agreed, tight hand and now they are reneging on this agreement, it is no longer so much of a surprise.” The White House added another layer on Monday by accusing “House Republican extremists” of taking the risk of “compromising vital food assistance for nearly seven million vulnerable women and children”, at the risk of “playing with people's lives", a possible paralysis of federal public services, effectively cutting off these federal expenditures.
Tensions are crystallizing around additional aid for Ukraine, after the visit to Washington on Thursday by Ukrainian President Volodymyr Zelensky. Both parties in the Senate are in favor. But, in the House of Representatives, a handful of elected officials from the Trumpist right refuse to cast their votes. “I will not vote to spend a single cent on the war in Ukraine. I am for America first,” declared Republican Marjorie Taylor Greene, close to Donald Trump, on Friday in a video published on the social network X (formerly Twitter). Another elected official, Eli Crane, also posted a video criticizing this aid: “People in my district, and across the country, are so tired of funding others.”
The necessary vote on the budget in Congress sometimes turns into a standoff, the specter of stopping federal services being regularly raised by the Republican camp to obtain concessions. Usually with a last minute resolution. But these recurring tensions are exacerbated this year by polarization in Congress. On the Senate side, the leaders of both parties, Chuck Schumer for the Democrats, Mitch McConnell for the Republicans, two veterans of politics, continue to discuss. “(We) are both strongly in favor of aid to Ukraine,” Chuck Schumer told CNN on Friday, saying he was “very, very optimistic.”
In a note published Monday, the Moody's agency stressed that the absence of an agreement would “underline the weakness of governance and institutions in the United States in terms of fiscal policy” and would have “a negative effect on sovereign debt » American, while it is the last agency to grant the maximum rating, AAA, to American debt.
Failing to agree, a draft provisional budget could be adopted, which would offer a few months of respite for elected officials to find common ground. This threat of paralysis comes just four months after the previous soap opera, that of the debt ceiling, the consequences of which would have been even more significant, with a possible payment default by the United States. As part of the agreement that was signed, the Democrats agreed to limit certain spending, which should have allowed the budget stage to pass smoothly. “We have to lock ourselves in a room and solve the problem,” said Republican elected official Tony Gonzales on Sunday. “I don’t want a “shutdown” but it is certain for me that the country is heading towards it and that everyone must prepare for it,” he added.
Among the consequences to anticipate, certain food aid checks may not be sent. Air traffic could be disrupted, national parks not maintained... Civil servants considered “non-essential” will be asked to stay at home, and will only receive their salaries once the problem has been resolved. The country has experienced four major “shutdowns” since 1976. The last, the longest, lasted more than a month at the end of 2018 and the beginning of 2019, reducing the GDP of the United States by $3 billion, according to the budget services. of Congress (CBO).