Is the federal government going to shut down?
In September, lawmakers passed a spending bill that funded the government through Friday 3 December. Now, they are on the hook to pass another bill.
Earlier this fall, to avert a government shutdown and avoid the risk of the United States defaulting on its debt, Congress passed a spending bill and an extension to the current debt limit. However, both of these stopgap measures are set to expire in the coming weeks.
Without the passage of a spending bill, the federal government is scheduled to run out of funds Friday 3 December at midnight. With prices increasing across the market, and the economic recovery jeopardized by the emergence of a new variant, neither party seems to want to be caught with the blame of a shutdown.
Senate leaders meet in private
Senate leaders Chuck Schumer and Mitch McConnell have begun to meet privately this week to come up with a spending bill that some same could fund the government through January or early February. Both leaders have told the press that they think a shutdown is unlikely.
On Monday, Sec. McConnel told the press in passing that "we won’t shut down." Sen. Schumer outlined that the House of Representatives will vote first and that once they have passed a bill "Senate Democrats are ready to pass this legislation, get it done as quickly as possible to avoid a needless shutdown."
However, the fact that the spending bill will only extend the negotiations rather than fund the government for more than a few months has many voters frustrated. With the economy in such a vulnerable state, the fact that the parties cannot agree on a budget places many families in a precious financial situation. A government shutdown, and even worse a debt default, which could happen if the debt ceiling is not increased, extended, or eliminated could be catastrophic as many benefit programs would run out of money.
Will the debt ceiling be increased?
While earlier this fall, Republicans seemed unwilling to increase or extend the debt ceiling, they have changed their tune. PBS has reported that a decision over the debt ceiling should be expected in mid to late December.
Senate Majority Leader Chuck Schumer and GOP leader Mitch McConnell said Tuesday they are still working on a solution for raising the federal debt ceiling. https://t.co/wbuW6Mug0m
— Bloomberg Government (@BGOV) December 1, 2021
The consequences of a US default are as potentially catastrophic now as they were in September. Treasury Secretary Janet Yellen sent a letter to Congress in November saying that her agency
"will be able to finance the U.S. government through Dec. 15," but highlighted that "there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the U.S. government beyond this date.”