In the USA, a possible “shutdown” is approaching, which would partially paralyze government business. A new bill for an interim budget failed in the US House of Representatives. It remains to be seen whether Republicans and Democrats will agree on a solution by the end of the deadline on Saturday night (local time). They blame each other for the worsening situation. The turbulence was triggered by a blockade maneuver by President-elect Donald Trump and tech billionaire Elon Musk, who hardly left the Republican’s side.
If there is a “shutdown” of the US government due to a lack of budget agreement, state institutions would have to partially stop working from the weekend and many state employees would not be paid for the time being – especially around Christmas.
After plan A, plan B also fails
Democrats and Republicans had actually already negotiated a comprehensive legal text for an interim budget. But Trump quickly torpedoed its passage on Wednesday – together with his close confidant Musk, who is supposed to help Trump cut government spending and criticized the draft negotiated by Democrats and Republicans as an “outrageous spending law”. Trump ultimately called on his Republican representatives not to approve the draft. Since then, Parliament has been in turmoil.
Under Trump’s pressure, the Republicans presented a new, significantly slimmed-down draft on Thursday, which the future president found “very good” but which the Democrats sharply criticized. Democratic House Minority Leader Hakeem Jeffries called the new proposal “laughable” and complained that extreme forces in the Republican Party were moving toward a government “shutdown.”
In a vote in the House of Representatives that was scheduled at short notice, the new draft failed – because of the almost unanimous resistance of the Democrats, but also because of resistance from a number of Republicans who are also critical of some of Trump’s last-minute demands. After the vote, the leadership of the Republican faction accused the Democrats of being responsible if there was a “shutdown.”
“President Musk”
The blockade action initiated by Trump and Musk is also a demonstration of the balance of power in the Republican Party. The fact that a president who has not yet been sworn in and a billionaire without a political mandate are trying to publicly dictate the course of action in Parliament is causing outrage, especially among Democrats. Jeffries called Trump and Musk “puppet masters.”
Some Democrats are already scoffing that Musk – the richest man in the world – is the one who is actually pulling the strings. Democratic Senator Elizabeth Warren told CNN that Musk appeared to be in charge with Republicans. Several Democratic representatives have already spoken smugly of “President Musk.”
A remote topic
The wrangling is also about the debt ceiling, which actually has nothing to do with the current budget negotiations. However, Trump made it an issue and stipulated a suspension of the border until 2027 in the draft presented on Thursday.
The cap sets the maximum level of government debt that can rise to finance current expenses such as salaries, social benefits, defense spending and interest on existing debt. If this cap is reached and not increased, the US government will not be allowed to take on any new debt. The discussion about the cap regularly leads to conflicts between Republicans and Democrats because it is often used as a pressure tool for other political goals.
Consequences of a “shutdown”
An interim budget would have to be passed not only by the House of Representatives, but also by the Senate and then signed by the incumbent President Joe Biden. If this is not achieved by midnight (local time) on Saturday night, government business will be partially paralyzed because the federal government has no fresh money available.
If such a “shutdown” mode only lasts a few days, the effects are very limited. However, the longer the duration, the more noticeable the effect – for state employees and ordinary citizens, but also for the economy. The longest shutdown in US history occurred at the turn of the year 2018/2019 – during Trump’s first term in office in the White House. Because of the dispute over the wall he was calling for on the border with Mexico, parts of the government stood still for more than five weeks.
In general, it is ensured that important areas that are responsible for security or basic services in the country are maintained even during a “shutdown” – for example in the police, the military, security at airports, border guards and in prisons.
