October 1st, the start of the new fiscal year, is just around the corner, yet Congress has still not reached an agreement on the budget proposal to fund the federal government. Over the past 47 years, the federal government has experienced ‘shutdowns’ due to budgetary impasses on 21 occasions. This time, Congress has until September 30th to reach an agreement on the new budget proposal and prevent a shutdown.
Critical Approval Process
For any budget to become law, it must pass through the House of Representatives, receive approval from the Senate, and finally be signed by US President Joe Biden.
Ukraine Fund and Internal Disputes
The U.S. Congress finds itself divided between the Democratic-controlled Senate and the Republican-led House of Representatives. Conservative Republicans, especially those on the far right, are aiming to use a government shutdown as leverage for budgetary spending cuts. Disagreements have arisen, particularly concerning spending plans and funding for the conflict in Ukraine.
Temporary Budget and Agency Shutdowns
According to U.S. laws, if Congress fails to approve a permanent budget for the fiscal year, which runs from October 1st to September 30th, temporary budgets must be enacted to bridge the gap. When temporary budgets are not approved, federal agencies temporarily suspend their operations. This could result in the halt of most government functions.
This situation carries the risk of disruptions in many sectors where there is interaction with the federal government in the USA. Non-essential government employees may be placed on mandatory furloughs, and some agencies and personnel may not receive their salaries until a new budget is passed.