The U.S. Senate and House are moving forward with conflicting plans for government funding, increasing the likelihood of a partial government shutdown. The Senate is set to vote on a stopgap funding bill that has bipartisan support, while the House is planning votes on partisan appropriations bills that are unlikely to pass. Congress must pass legislation before midnight on Saturday to avoid furloughs of federal workers and the disruption of various services. House Republicans are rejecting spending levels for fiscal year 2024 and demanding further cuts, as well as legislation to address immigration issues at the southern border.

Speaker Kevin McCarthy negotiated a spending level agreement with President Joe Biden in May, but some House Republicans, particularly hardline conservatives, are pushing for deeper cuts and stricter border control measures. McCarthy is facing pressure from his caucus, with some threatening to oust him from his leadership role if he supports a bill that requires Democratic votes to pass. Former President Donald Trump has also advocated for a government shutdown through social media. McCarthy has suggested that a shutdown could be avoided if Senate Democrats address border issues in their stopgap measure.

Credit agencies have warned that political polarization and brinkmanship are negatively impacting the U.S. financial outlook and credit rating. Most members of Congress, including Senate Republicans, have rejected the House Republicans’ focus on border issues as grounds for a shutdown. Senate Majority Leader Chuck Schumer has emphasized the need to solve the funding issue and criticized McCarthy for letting “MAGA radicals drive his decisions.” The House is expected to vote on its own short-term funding measure, but its success could depend on the passage of fiscal 2024 spending bills for various departments. The risk of a shutdown remains high.

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