Government Shutdown Looms — But Congress Goes on Vacation
Author: Greg Valliere
February 16, 2024
EVERYONE SEEMINGLY FORGOT about a possible government shutdown in early March, but the threat is real as Republicans are insisting that they won’t “kick the can” again. Spring is coming, as the most dysfunctional Congress in recent memory searches for a plan.
WHAT’S THE REACTION on Capitol Hill? Go on a nice long vacation, starting today. Congress will be on recess for the next 13 days, returning just before the March 1 and March 8 deadlines to pass final spending bills or risk a partial shutdown.
CONVENTIONAL WISDOM HOLDS that a shutdown wouldn’t have much of an impact on the economy, but there’s one significant risk — still more debt downgrades by the credit agencies, which have been harshly critical of Congress — not just because of the enormity of the deficit, but the inability of the dysfunctional lawmakers to act promptly. This applies to many issues, including aid to Ukraine, Israel and others.
KICK THE CAN? The old standby — an extension of the deadline — is the usual reaction in Congress, but Republicans insist they won’t do it again. Very few GOP lawmakers want a shutdown — the reputation of this Congress is in tatters — so they’re exploring all options, including another extension, perhaps for the rest of the year, or a deal that would require votes from Democrats.
HOUSE SPEAKER MIKE JOHNSON, on thin ice as issue after issue stalls, would risk his ouster as Speaker if he seeks votes from Democrats, so the least distasteful option for him would be a deal lasting through the year. If that requires a short-term extension, it would complicate a wide range of issues — such as raising the child tax credit — if they aren’t resolved before the April 15 tax filing deadline.
A LONG-TERM DEAL LASTING THROUGH THE FISCAL YEAR, which ends on Sept. 30, isn’t out of the question. That is what’s supposed to happen, but there probably isn’t time to get that done in early March — not with Congress on vacation for the next two weeks.
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