By Richard Cowan, Andy Sullivan, Katharine Jackson and Bo Erickson, Reuters
Photo: AFP / Jim Watson
Republicans in the US Congress huddled to find a path forward after President-elect Donald Trump rejected a bipartisan deal to avert a partial government shutdown and demanded lawmakers abolish the nation’s debt ceiling.
Unless a deal passes the Republican-controlled House of Representatives and Democratic-majority Senate, the US government will begin a partial shutdown on Saturday (Sunday NZT) that would interrupt funding for everything from air travel to law enforcement in the days leading up to Christmas and cut off paychecks for more than 2 million federal workers. Many government operations, such as Social Security retirement payments, would continue.
Trump dug in his heels, saying Congress should not keep the government operating unless it also eliminates limits on the federal debt, which has grown rapidly over the past decade and now tops US$36 trillion (NZ$64t).
“The debt ceiling should be thrown out entirely,” Trump said.
Previous fights over the debt ceiling have spooked financial markets, as a US government default would send credit shocks around the world. The limit has been suspended under an agreement that technically expires on 1 January, though lawmakers likely will not have to tackle the issue until the spring.
One of Trump’s top priorities when he returns to office on 20 January will be extending tax cuts that could reduce revenues by US$8 trillion over 10 years, which would drive the debt higher without offsetting spending cuts. He has vowed not to reduce retirement and health benefits for seniors that make up a vast chunk of the budget and are projected to grow dramatically in the years to come.
Republican lawmakers provided few details as they emerged from House Speaker Mike Johnson’s office.
“The situation is still fluid,” Representative Tom Emmer, the chamber’s No. 3 Republican, told reporters.
Top House Democrat Hakeem Jeffries said it was “premature” to discuss acting on the debt ceiling.
“This is a moment that’s not about the incoming president, it’s not about millionaires and billionaires, it’s about the harm the House Republicans will do the American people if the government shuts down,” he said at a news conference.
Wait till next year?
Some Republicans urged their colleagues to allow a shutdown until Trump is sworn in on 20 January, when Republicans will control both chambers of Congress.
The last government shutdown took place in December 2018 and January 2019 during Trump’s first White House term.
Republican Representative Nancy Mace said Congress should keep the government closed until Trump takes office if they cannot reach a deal.
“Let’s reset Jan. 20th. It’s not the scary shutdown the lying media tells you it is,” she said on social media.
Democrats have shown little interest in revising their deal to satisfy Trump and his ally Elon Musk, the world’s richest person, who has vowed to cut US$2 trillion from the US$6.2 trillion federal budget.
The bipartisan bill would have funded government agencies at current levels and provided US$100 billion for disaster relief and US$10 billion in farm aid. It also included a wide range of unrelated provisions, such as a pay raise for lawmakers and a crackdown on hidden hotel fees.
A shutdown would delay relief for Americans whose lives were upended by Hurricanes Milton and Helene this past fall, as well as other natural disasters. Towns in Vermont are still waiting for aid to rebuild bridges and roads washed out by storms in 2023 and 2024, and residents whose homes were destroyed are still waiting for housing aid, Democratic Senator Peter Welch said in an interview. Without emergency aid, vegetable farmers who lost their crops will have to “make a hard decision, and it may mean they stop farming,” he noted.
The unrest also threatened to topple Johnson, a mild-mannered Louisianan who was thrust unexpectedly into the speaker’s office last year after the party’s right flank voted out then-Speaker Kevin McCarty over a government funding bill. Johnson has repeatedly had to turn to Democrats for help in passing legislation when he has been unable to deliver the votes from his own party.
Several Republicans said they would not vote for him as speaker when Congress returns in January, potentially setting up another tumultuous leadership battle in the weeks before Trump takes office.
“WE MUST STAND FIRM WITH THE AMERICAN PEOPLE TO STOP THE MADNESS!! No matter what. Even if we have to elect new leadership,” Republican Representative Marjorie Taylor Greene said on social media.
Trump offered his qualified support for the embattled speaker.
“If the speaker acts decisively, and tough, and gets rid of all of the traps being set by the Democrats, which will economically and, in other ways, destroy our country, he will easily remain speaker,” he told Fox News Digital.
– Reuters