Lawmakers warn that US is heading for shutdown as budget talks stall

Receive free US government shutdown updates

We’ll send you a myFT Daily Digest email rounding up the latest US government shutdown news every morning.

US lawmakers have warned that a government shutdown is increasingly certain as hopes dwindle of a last ditch compromise to resolve a budgetary stand-off in the world’s largest economy.

Speaking on Sunday, both Democrats and Republicans said time was running out for a deal before October 1, when current funding for federal operations ends.

A shutdown would force thousands of federal workers to stay home, paralysing vast swaths of the US government in a way that could hurt households and businesses, and damage the American economy.

The latest budgetary crisis in Washington comes just a few months after Congress and the White House narrowly averted an even more destructive default on US debt. But the bipartisan agreement struck then between US president Joe Biden and Kevin McCarthy, the Republican House speaker, did not sit well with hardline Republicans and allies of former president Donald Trump, who are now blocking any new fiscal compromise.

In recent days, McCarthy has floated a 45-day extension of government funding in order to give more time for an agreement on the details of spending for the next fiscal year, but is facing stiff resistance to that plan.

“I don’t want to see a shutdown, but there’s no doubt in my mind that the country is headed for a shutdown and everyone should prepare as such,” Tony Gonzales, a Texas Republican, told CBS on Sunday.

Maxine Waters, the California Democrat who is her party’s top member of the House financial services committee, also said a shutdown was looming. “The Republican Party is in complete disarray. It is chaotic. The speaker is on his knees begging, but . . . he has no control,” she told MSNBC.

On Saturday night, Biden warned that a shutdown could jeopardise military pay, food safety, early childhood education programmes, and cancer research.

“Funding the government is one of the most basic responsibilities of Congress. It’s time for Republicans to start doing the job America elected them to do. Let’s get this done,” Biden said at a dinner hosted by the Congressional Black Caucus.

In the past, Democrats have benefited politically from fiscal and budgetary crises triggered by Republican intransigence. But the stand-off is coming at a time when Biden is dogged by low approval ratings, particularly on the economy, that are casting a shadow over his re-election bid. And Pete Buttigieg, the transport secretary, suggested that the White House could still face repercussions politically in an extended shutdown.

“The most frustrating thing, of course, is that the president, the administration have a responsibility to make sure no matter what Congress does that the country keeps on succeeding”, Buttigieg told NBC on Sunday.

Despite the faint hopes of an agreement ahead of the October 1 deadline, there is still a chance of an intervention to resolve the crisis either through an agreement between centrist lawmakers of both parties in the House, or by a deal forged by Senate leaders that would pile pressure on the lower chamber to accept a compromise.