WASHINGTON: US House of Representatives Republicans are due to unveil a stopgap measure on Saturday aimed at averting a government shutdown, the latest in a series of standoffs that contributed to Moody’s lowering its outlook on the nation’s credit.
The move to change its outlook to “negative” from “stable” by the last major credit ratings agency to maintain a top “AAA” rating on the US government came six months after Congress brought the nation to the brink of default on $31.4 trillion in debt, and just a week before federal agencies will run out of money without congressional action.
Newly installed House Speaker Mike Johnson, the top Republican in Congress, has spent the past several days discussing options with his slim 221-212 House majority, including how long to extend stopgap funding while lawmakers negotiate spending legislation for the 2024 fiscal year that runs through 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 said in a statement.
The move’s immediate effect was renewed finger-pointing between President Joe Biden’s White House and Republicans, as each sought to blame the other.
“Moody’s decision to change the US outlook is yet another consequence of congressional Republican extremism and dysfunction,” White House spokesperson Karine Jean-Pierre said. Johnson cited the outlook change as “the latest example of the failure of President Biden and Democrats’ reckless spending agenda.” In a statement, he vowed to “fight to get our finances in order.”
Moody’s announced its decision after the federal government ended the last fiscal year with a $1.7 trillion deficit — its largest outside the depths of the COVID pandemic. That reflects both the toll of high spending and past tax cuts. The House and Democratic-led Senate must agree on a spending vehicle that President Joe Biden can sign into law by Nov. 17, or risk a fourth partial government shutdown in a decade that would close national parks, disrupt pay for as many as 4 million federal workers and disrupt a swath of activities from financial oversight to scientific research.
House Republicans hope to vote on Tuesday on a stopgap measure, which could extend discretionary funding for federal agencies into mid-January.
Some House Republicans have called for a “clean” continuing resolution, or “CR,” that would keep funding at current levels and contain no partisan policy riders such as immigration restrictions at the US-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,” Representative Tom Cole told reporters before lawmakers left Washington on Thursday.
“That’s my opinion,” Cole said. “But I would be supportive of whatever the speaker puts out.”
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