US government teeters on brink of shutdown with no deal in view

The US government hurtled towards a shutdown Friday, with hardline Republicans creating disarray in their own party and President Joe Biden’s administration issuing increasingly dire warnings of everything from impending border chaos to travel disruptions.

The closure, set to start after midnight Saturday (0400 GMT Sunday) if lawmakers fail to reach a deal, would be the first since 2019 — impacting millions of federal employees and military personnel while threatening the closure of national parks.

The two chambers of Congress are deadlocked, with a small group of Republicans in the House of Representatives pushing back against any stopgap measure that would at least keep the lights on.

On Friday, hardline House Republicans defeated a plan proposed by their own leader to keep funds flowing, with a bill to temporarily fund the government rejected in a 232-198 vote.

The measure involved deep spending cuts and would unlikely have passed the Democratic-majority Senate.

Office of Management and Budget director Shalanda Young said Friday it was up to hardline Republican lawmakers to resolve the impasse, telling reporters “there is still a chance” of avoiding a shutdown.

White House Press Secretary Karine Jean-Pierre added at a briefing that “the conversation is not between the president and McCarthy.”

“The conversation needs to happen between Speaker McCarthy and his caucus. That’s the fix, that’s the chaos that we’re seeing and that’s what he needs to focus on,” she added.

McCarthy, however, earlier blamed Democrats, saying they are the ones blocking a solution.

– Park closures –

A shutdown would mean the majority of national parks — from the iconic Yosemite and Yellowstone in the west to Florida’s Everglades swamp — would be closed to public access beginning Sunday.

Only areas that are physically accessible to the public will remain open with reduced services, according to the Department of the Interior.

These include the National Mall in Washington and Gateway National Park in San Francisco, alongside lookouts, campgrounds and trails.

“At National Park Service units across the country gates will be locked, visitor centers will be closed and thousands of park rangers will be furloughed,” said a senior official.

With student loan payments resuming in October, officials also said Friday that key activities at Federal Student Aid will continue for a couple of weeks if a shutdown happened.

But prolonged closure could cause bigger disruptions.

– Credibility hit –

A shutdown places the world’s largest economy at risk “unnecessarily,” said White House National Economic Council director Lael Brainard on CNBC.

Risks include air travel delays, with air traffic controllers asked to work without pay, while households may be unable to access certain benefits, she added.

Treasury Secretary Janet Yellen warned a closure could also delay infrastructure improvements.

“In the immediate term, a government shutdown will only reduce GDP by 0.2 percentage points each week it lasts,” said a report released Friday by think-tank the Center for Strategic and International Studies.

“However, halting critical trade functions of the United States will also undermine the United States’ overall credibility as a commercial partner, impede ongoing negotiations, and hinder export control enforcement capabilities,” the report added.

A State Department spokesperson called it was crucial for Congress to reach a deal and support a request by the Biden administration for supplemental funding for Ukraine and other matters.

“Delays in being able to access these funds jeopardize the national security of the United States and cede the field to the PRC and Russia,” the spokesperson said, referring to the People’s Republic of China.