![US House Republicans eye plan to avert government shutdown as Moody's warns](https://i-invdn-com.investing.com/trkd-images/LYNXMPEJAA02K_L.jpg)
© Reuters. FILE PHOTO: Newly-elected U.S. Home Speaker Mike Johnson (R-LA) walks from his workplace to the Home flooring on the U.S. Capitol in Washington, U.S., October 26, 2023.REUTERS/Sarah Silbiger
By David Morgan
WASHINGTON (Reuters) – U.S. Home of Representatives Republicans are attributable to unveil a stopgap measure on Saturday aimed toward averting a authorities shutdown, the most recent in a collection of standoffs that contributed to Moody’s (NYSE:) reducing its outlook on the nation’s credit score.
The transfer to alter its outlook to “negative” from “stable” by the final main credit score scores company to take care of a high “AAA” score on the U.S. authorities got here six months after Congress introduced the nation to the brink of default on $31.4 trillion in debt and only a week earlier than federal businesses will run out of cash with out congressional motion.
Newly put in Home Speaker Mike Johnson, the highest Republican in Congress, has spent the previous a number of days discussing choices along with his slim 221-212 Home majority, together with how lengthy to increase stopgap funding whereas lawmakers negotiate a spending plan for the fiscal yr that runs by way of Sept. 30.
“Continued political polarization within US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,” Moody’s mentioned in an announcement.
The transfer might strengthen the hand of Republicans who need to push for sharper spending cuts, after the federal authorities ended the final fiscal yr with a $1.7 trillion deficit — its largest exterior the depths of the COVID pandemic. That displays each the toll of excessive spending and previous tax cuts.
“Moody’s just downgraded our credit rating outlook to negative because of our out-of-control government spending and deficits,” hardline Republican Consultant Andy Harris mentioned on social media.
The White Home sought to pin blame for the outlook change, which cited the excessive deficit and rising rates of interest, on Republicans.
“Moody’s decision to change the U.S. outlook is yet another consequence of congressional Republican extremism and dysfunction,” White Home spokesperson Karine Jean-Pierre mentioned.
FRIDAY FUNDING DEADLINE
The Home and Democratic-led Senate should agree on a spending automobile that President Joe Biden can signal into legislation by Nov. 17, or threat a fourth partial authorities shutdown in a decade that will shut nationwide parks, disrupt pay for as many as 4 million federal employees and disrupt a swath of actions from monetary oversight to scientific analysis.
Home Republicans hope to vote on Tuesday on a stopgap measure, which might prolong discretionary funding for federal businesses into mid-January.
Some Home Republicans have referred to as for a “clean” persevering with decision, or “CR,” that will hold funding at present ranges and comprise no partisan coverage riders resembling immigration restrictions on the U.S.-Mexico border that Democrats view as “poison pills.”
“Plainer is better. The things you should put on there are things that both sides agree to. Don’t use it as an effort to jam somebody,” Consultant Tom Cole advised reporters earlier than lawmakers left Washington on Thursday.
“That’s my opinion,” Cole mentioned. “But I would be supportive of whatever the speaker puts out.”
However Johnson has additionally been underneath stress from Republican hardliners for a CR with spending cuts, conservative insurance policies and a fancy construction that lawmakers of each events say might elevate the probabilities of a partial shutdown by making it more durable for the Home to achieve settlement with the Democratic-led Senate.
Consultant Chip Roy, a outstanding member of the hardline Home Freedom Caucus, mentioned he might settle for a stopgap measure that additionally accommodates help to Israel in its battle with Hamas.
“My main thing is: I want spending levels to be down; I want us to separate Israel; and I want us to be able to deal with the border,” the Texas Republican mentioned.
Roy mentioned he needed Congress to deal with Israel help separate from that for Ukraine — whereas Biden has sought to package deal the 2 collectively, including, “If (Israel) rides with a CR … fine.”
Home Republican hardliners have been pushing to chop fiscal 2024 spending under the $1.59 trillion degree that Biden and Johnson’s predecessor agreed within the Might deal that averted default. However even that could be a small slice of the general federal price range, which additionally consists of obligatory outlays for Social Safety and Medicare, and topped $6.1 trillion in fiscal 2023.
Johnson, who received the speaker’s gavel lower than three weeks in the past, might put his personal political future in danger by choosing a clear CR that may win sufficient prepared bipartisan assist to go by way of Congress rapidly.
His predecessor, Kevin McCarthy, was ousted from the job by eight Republican hardliners early final month, after he moved a bipartisan measure to avert a shutdown on Oct. 1, when fiscal 2024 started. McCarthy opted for the bipartisan route after hardliners blocked a Republican stopgap measure with options meant to appease the celebration’s far proper.