Tuesday, September 28, 2021

Budget policy: The USA is threatened with insolvency

SZ.de Budget policy: The USA is threatened with insolvency 39 min. ago | 139 Republicans in the U.S. Senate are blocking a spending bill that was supposed to keep the government funded beyond Thursday. Now, shutdown and default loom. The Republicans are apparently putting it to the test in the U.S. Senate.© Samuel Corum/afp The Republicans are apparently putting it to the test in the U.S. Senate. The U.S. faces the threat of insolvency In the U.S., the threat of a partial government shutdown starting at the end of the week is drawing closer. In a formal vote in the U.S. Senate on Monday, Republicans blocked a bill aimed at securing government funding for the time being beyond the end of the fiscal year this Thursday. The new budget year starts Oct. 1, this Friday. If no budget deal is passed by then, there will be a "shutdown" of parts of the government. This means that some state employees would have to take compulsory leave or work temporarily without pay. Depending on how long such a state of affairs lasts, certain government services could be restricted or payments delayed. Such "shutdowns" of parts of the government occur more often in the United States. However, the administration of U.S. President Joe Biden wants to avoid this at all costs. The House of Representatives had passed the regulation for temporary financing of the government last week with the votes of the Democrats. In the Senate, however, the Republicans opposed it. They complained that the bill also provides for suspending the debt ceiling for the time being - something they oppose. Without an increase in the debt ceiling by Congress, however, the U.S. government faces default next month, according to Treasury Secretary Janet Yellen. It is not possible to give an exact date, but the government will run out of money before the end of "the month of October," Yellen warned in early September. If the government defaulted on its debt in October, the U.S. economy and financial markets around the world would face "irreparable damage."