Days from government shutdown, US budget talks threaten Ukraine aid

THE US Congress was running out of time on Tuesday to avoid a partial government shutdown forced by hard-right Republicans, with White House plans to provide another US$24 billion in war aid for Ukraine at risk if a deal was to be reached.

With just days left before the Sept 30 deadline, negotiations continued to seek a way to meet the demands of the Republican-led House of Representatives and the Democratic-controlled Senate.

Late Tuesday, the Senate released a draft budget measure that would cover government spending through Nov 17.

Both Senate Majority leader Chuck Schumer and Republican minority leader Mitch McConnell endorsed the draft, but there was no immediate indication that the warring factions of House Republicans would take it up if passed.

“Shutting the government down over a domestic budget dispute doesn’t strengthen anyone’s political position,” McConnell said.

“It just puts important progress on ice. And it leaves millions of Americans on edge,” he said.

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Frozen services, no pay cheques

If a deal isn’t reached by Saturday, hundreds of thousands of federal employees could be furloughed, curtailing a wide swath of government services.

That could mean welfare recipients don’t get payments they depend on, and airport operations could slow, snarling travel plans for millions.

Some employees would continue to work - like the military and others deemed essential - but would not get their pay cheques, until a budget is finally passed.

Democratic President Joe Biden placed the blame on a small group of “extremist” Republican lawmakers in the House, saying he had previously reached a deal on the budget with Senate Republican leader Mitch McConnell.

The House hardliners “are determined to shut down the government,” Biden said in a video message.

Meanwhile the Republican mainstream “refuse... to stand up to the extremists in their party,” Biden said.

“So now everyone in America could be forced to pay the price,” he said.

Ukraine aid on the chopping block

The Senate draft confirmed that Ukraine, which has been battling Russian invaders for more than a year and a half, could find its lifeline of US arms and economic aid under threat.

Last week, Ukrainian President Volodymyr Zelensky visited Capitol Hill to try and convince the slowly growing number of skeptical Republican members of Congress not to give up on his country.

In the Senate draft released on Tuesday, rather than US$24 billion, Ukraine was allocated just US$6.1 billion.

But hardliners in the House have said they don’t want any more money going to Kyiv, after the US$110 billion already provided since the invasion began in February 2022.

“When you’ve got a president who is more concerned about the sovereignty of Ukraine than our own national sovereignty, then you’ve got a problem,” said Republican Representative Chip Roy, referring to Biden.

Markets sink without a deal

Even if the Senate passes the measure quickly, there were doubts that the House could act quickly enough to avoid at least a short shutdown.

The prospect of the world’s largest economy unable to produce a government budget comes just four months after Washington came dangerously close to defaulting on its debt due to political deadlock.

That could have had disastrous consequences for the American economy and beyond.

US stock markets sank more than one per cent on Tuesday amid the prospect for a government shutdown.

On Monday, Moody’s - the only major ratings agency to maintain its maximum score for US sovereign debt - warned that the latest drama could threaten its top-tier status. AFP