House Speaker Kevin McCarthy has rejected the Senate’s bipartisan bill aimed at avoiding a government shutdown. As a result, the likelihood of a government shutdown occurring this weekend has increased.
McCarthy is currently engaged in negotiations to find a solution that meets the demands of a small group of Republicans in his chamber who are calling for significant spending cuts. Although he is working on his own plan to keep the government running, it remains uncertain whether an agreement that satisfies these holdouts would be approved by the Democratic-controlled Senate.
According to Goldman Sachs, the chances of a shutdown this weekend are now estimated to be around 90%. Jan Hatzius, the Chief Economist at Goldman Sachs, further warns that if a shutdown does occur, it could potentially last for two to three weeks.
In the event of a government shutdown, various government employees, including military personnel and airport security workers, would temporarily go without pay. Moody’s has already indicated that this would have a negative impact on the credit rating of the United States.
Earlier this week, the Senate passed a stopgap funding bill which was subsequently sent to the House. However, McCarthy has made it clear that he will not bring the Senate bill up for a vote.