US House GOP Plans Measure to Prevent Shutdown Amid Credit Alert
- The U.S. House of Representatives Republicans plan to release a stopgap measure to prevent a partial government shutdown. This decision follows Moody’s credit agency lowering its outlook on the U.S government’s credit ratings to “negative.”
- Political polarization in Congress influenced Moody’s decision, as the escalating deficits may not be manageable if Congress can’t reach an agreement. The U.S. recorded a $1.7 trillion deficit last year, the largest outside of the COVID-19 pandemic, and rising interest rates mean the cost of servicing this debt will continue to grow.
- The stopgap measure, also referred to as the “CR,” is still in flux, with its form unclear. Some Republicans have called for a “clean” CR that would run to mid-January and have no spending cuts or conservative policy riders that Democrats oppose. In contrast, hardline conservatives want the measure to include spending cuts, policies including tighter security at the U.S.-Mexico border, and an unorthodox structure with staggered deadlines for different segments of the federal budget.
U.S. House GOP Plan to Unveil Stopgap Measure to Thwart Partial Government Shutdown
Newly-elected U.S. House Speaker Mike Johnson (R-LA) is seen heading to the House floor at the Capitol. Acquire Licensing Rights
On Nov 10, U.S. House Republicans are working on a last-minute measure to ward off a possible government shutdown, following Moody’s credit ratings downgrade to “negative” for the U.S. government.
An insider revealed that plans for this continuing resolution (CR) are still uncertain. House Speaker Mike Johnson has been in negotiations over multiple CR options.
Moody’s attributed its decreased credit outlook to increasing political divisions in Congress, raising concerns about their ability to manage the growing deficits.
A record high deficit of $1.7 trillion was recorded last year by the U.S., and the cost of servicing this debt is expected to increase due to rising interest rates.
Earlier this year, Congress had brought the U.S. close to defaulting on its $31 trillion debt, which could have significantly impacted global financial markets.
With the potential shutdown looming, some Republicans are advocating for a “clean” CR that would extend to mid-January without any spending cuts or policy riders that Democrats oppose.
However, conservative hardliners are pushing for a CR with spending cuts, stronger U.S.-Mexico border security, and staggered budget deadlines.
Lawmakers warn that a prolonged partisan battle could prevent Congress from preventing a shutdown. Meanwhile, Senate Majority Leader Chuck Schumer took an initial step towards moving his own stopgap measure.
The Thomson Reuters Trust Principles.
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