With five days left on the 12th to negotiate to avoid a federal government shutdown (temporary business suspension), political chaos surrounding the budget continues.
With the 2024 fiscal year (October 2023 – September 2024) already starting on the 1st of last month, if the follow-up budget bill is not passed by Congress by the 17th, when the application period for the temporary budget plan agreed upon by the ruling and opposition parties in the United States ends, the United States will face the suspension of some federal government operations.
Shutdown becomes inevitable.
In this situation, House Speaker Mike Johnson, a Republican, proposed another temporary budget plan to be used until February next year, but the White House strongly opposed it, and some hardliners within the Republican Party also voiced opposition.
Chairman Johnson unveiled a temporary budget plan on the 11th that covers only the expenditures needed from January to February of next year, rather than the entire budget needed for government operations in fiscal 2024 and explained it to fellow Republican lawmakers.
This is characterized by different timing of budget exhaustion for each government department. Related ministries such as Veterans Affairs, Transportation, Agriculture, Housing, and Energy will allocate the necessary budgets by January 19th of next year, and the Department of National Defence and the State Department will have budgets up to February 2nd in the ‘Phase 2’ budget plan.
American media reported that the purpose of the second phase of the budget plan is to break away from the previous practice of processing a total of 12 expenditure bills for each department as one and encourage individual negotiations on expenditure bills.
Chairman Johnson said, “The Phase 2 budget plan is essential to put the Republican Party in the best position in the fight for conservative victory.” Although this plan did not reflect the large differences of opinion between the two parties, including the large-scale budget cuts requested by the Republican Party, opposing opinions were expressed not only from the administration (White House) but also from some Republican lawmakers.
White House press secretary Carine Jean-Pierre criticized in a statement released on the 11th, “This plan is just a recipe for more Republican chaos and more federal government shutdowns.” “House Republicans must stop wasting time on their political divisions, do their job, and work bipartisan to prevent a shutdown,” Jean-Pierre said. In addition, Representative Chip Roy (Texas), a member of the Freedom Caucus, a hard-line Republican group, said in a post onEven if the Republican Party, which is the majority party in the House of Representatives, passes this budget bill in the House of Representatives through vote control, since the Democratic Party (including pro-Democratic independents) is the majority party in the Senate, if the Democratic Party continues to oppose it, it will be difficult to pass and the budget bill will drift. However, some believe that there is room for negotiation regarding this budget.
Controversial contents, such as the large-scale budget cut plan and the budget plan to support the Israel and Ukraine package, which the Democratic Party resolutely opposes, were removed, and the defence budget with great urgency was placed in the ‘second stage (applied until February 2)’ category, which has a long application period. In that sense, Bloomberg News pointed out that “Chairman Johnson’s budget proposal did not include the 30% budget cut and amendments to foreign asylum-related laws that Republican hardliners have been demanding,” and evaluated, “Chairman Johnson has improved the prospects for compromise.”
Even at the end of September, when former House Speaker Kevin McCarthy, who stepped down after the dismissal bill was passed on the 3rd of last month, was in office, there was a situation on the brink of a shutdown. In a situation where the ruling and opposition parties are in a tense standoff over demands from some in the Republican Party for large-scale budget cuts, former Speaker McCarthy proposed a compromise 45-day interim budget plan on September 30, the last day of the 2023 fiscal year, and the proposal was submitted a few hours before the start of the shutdown.
However, ultra-hardliner Matt Gates (Florida) of the House Republican Party, who opposed such a ‘compromise’, proposed a bill to dismiss then-Speaker McCarthy, and it was eventually passed, leaving McCarthy as the first Speaker of the House to be ousted by vote in U.S. history.
The renewed shutdown crisis is also casting a shadow on the U.S. economy.
On the 10th, international credit rating agency Moody’s maintained the United States’ national credit rating at ‘Aaa’, the highest rating, but adjusted the rating outlook from ‘stable’ to ‘negative’.
Moody’s cited “political polarization within Congress” as the basis for this measure. He mentioned the shutdown crisis.
The House Steering Committee will hold a hearing on the 13th to consider whether to submit Chairman Johnson’s second phase interim budget plan to the plenary session for a vote.