Newly elected Speaker of the US House of Representatives Mike Johnson (R-LA) walks from his office to the House floor at the US Capitol in Washington, US, on 26 October 2023.REUTERS/Sarah Silbiger Acquire license rights
WASHINGTON (Reuters) – Republicans in the U.S. House of Representatives will unveil a stopgap measure on Saturday aimed at averting a government shutdown, the latest in a series of standoffs that helped prompt Moody’s to cut its outlook on the nation’s credit. country.
The decision to change its outlook from “stable” to “negative” by the last major credit rating agency to maintain a top rating of “AAA” for the U.S. government came six months after Congress led the nation on the verge of defaulting on $31.4 trillion in debt, and just a week before federal agencies will run out of money without congressional action.
Newly installed House Speaker Mike Johnson, the top Republican in Congress, has spent the last few days discussing options with his slim 221-212 House majority, including how long to extend stopgap funding while lawmakers negotiate. spending legislation for the ending fiscal year 2024. September 30th.
“Continued political polarization within the US Congress increases the risk that successive administrations will be unable to reach consensus on a fiscal plan to curb declining debt affordability,” Moody’s said in a statement.
The immediate effect of the move was a new sign of blame between President Joe Biden’s White House and Republicans, as each sought to blame the other.
“Moody’s decision to change America’s outlook is yet another consequence of congressional Republican extremism and dysfunction,” said White House spokeswoman Karine Jean-Pierre.
Johnson cited the change in perspective as “the latest example of the failure of President Biden and the Democrats’ reckless spending agenda.” In a statement, he vowed to “fight to get our finances in order.”
Moody’s announced its decision after the federal government ended the last fiscal year with a $1.7 trillion deficit, the largest outside the depths of the COVID pandemic. That reflects both the cost of high spending and past tax cuts.
FRIDAY FUNDING DEADLINE
The Democratic-led House and Senate must agree on a spending vehicle that President Joe Biden can sign into law by Nov. 17, or risk a fourth partial government shutdown in a decade that would close national parks and disrupt the payment of up to 4 million people. federal workers and disrupt a range of activities, from financial oversight to scientific research.
House Republicans hope to vote Tuesday on a stopgap measure, which could extend discretionary funding for federal agencies through mid-January.
Some House Republicans have called for a “clean” continuing resolution, or “CR,” that would keep funding at current levels and would not contain partisan policies such as immigration restrictions at the U.S.-Mexico border, which Democrats see them as “poison pills.”
“The simpler, the better. The things that need to be put there are things that both sides agree on. Don’t use it as an effort to stonewall someone,” Rep. Tom Cole told reporters before lawmakers They will leave Washington on Thursday.
“That’s my opinion,” Cole said. “But I would support whatever the speaker says.”
But Johnson has also been under pressure from hardline Republicans for a CR with spending cuts, conservative policies and a complex structure that lawmakers in both parties say could increase the chances of a partial shutdown by making it harder for the House to reach to an agreement with the Democrats. -Senate led.
Rep. Chip Roy, a leading member of the hardline House Freedom Caucus, said he could accept a stopgap measure that also contains aid to Israel in its war with Hamas.
“The main thing is: I want spending levels to be low; I want us to separate Israel; and I want us to be able to deal with the border,” the Texas Republican said.
Roy said he wanted Congress to handle aid to Israel separately from aid to Ukraine, while Biden has tried to merge the two, adding: “If (Israel) travels with a CR… fine.”
Hardline House Republicans have been pushing to cut 2024 fiscal spending below the $1.59 trillion level that Biden and Johnson’s predecessor agreed to in the May deal that averted default. But even that is a small portion of the overall federal budget, which also includes mandatory outlays for Social Security and Medicare, and topped $6.1 trillion in fiscal year 2023.
Johnson, who won the presidential gavel less than three weeks ago, could put his own political future at risk by opting for a clean CR who can garner enough bipartisan support to quickly pass Congress.
His predecessor, Kevin McCarthy, was removed from office by eight hardline Republicans early last month after he introduced a bipartisan measure to avoid a shutdown on Oct. 1, when fiscal year 2024 began. McCarthy opted for the route bipartisan after hardliners blocked a Republican stopgap measure with features intended to appease them.
Reporting by David Morgan; Editing by Scott Malone and Daniel Wallis.
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