White House Urges Preparation for Federal Government Shutdown

[Image source=AP Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Amid growing concerns about an unprecedented default (debt default) crisis in U.S. history, the White House stated that if a temporary budget bill is not passed by Congress by the 30th, preparations must be made for a federal government shutdown (partial work stoppage).

According to the Washington Post and others on the 23rd (local time), Abdullah Hasan, spokesperson for the White House Office of Management and Budget (OMB), said to federal agencies, "We hope Congress will take bipartisan action to avoid default in a situation where efforts are being made to boost economic recovery against the pandemic," adding, "The government must prepare plans for the possibility of funding shortages."

The U.S. Congress set the debt ceiling at $22.3 trillion in August 2019 but decided to suspend its application for about two years until July this year. However, due to conflicts over the infrastructure budget bill, no follow-up legislation was passed, and in the meantime, the debt soared to $28.7 trillion.

The House of Representatives passed a bill on the 21st to fund the federal government until December 3 and to suspend the debt ceiling until December next year. Within the limit set by Congress, the government can raise funds through debt, but this obligation would be waived until the following year.

However, it is uncertain whether this bill will pass in the Senate. With Republicans opposing it, saying they can no longer overlook the government's massive spending, at least 10 Republican senators' approval is needed for the bill to pass in the Senate, where seats are evenly divided between the two parties.

If this bill does not pass Congress, the federal government faces the risk of shutdown and default starting next month. To prevent a shutdown, temporary funding must be approved by September 30, the day before the new fiscal year begins on October 1.

Democratic House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer announced they would combine government debt and spending bills for processing. The Republicans stated that if the debt ceiling extension is removed from the bill, they would support a temporary spending bill to avoid a shutdown.

This content was produced with the assistance of AI translation services.