Berliner Boersenzeitung - Days from shutdown, US budget talks threaten Ukraine aid

With just days left before the September 30 deadline, negotiations continued to find a way to meet the demands of the Republican-led House of Representatives and the Democratic-controlled Senate.

None of the different proposals for a short-term spending bill to keep government services going even temporarily has found enough support in the two chambers -- or within the divided Republican Party.

That could mean that on October 1, hundreds of thousands of federal employees could be furloughed -- seeing their paychecks held back and the services they run curtailed. It will also mean that many welfare recipients won't get their payments.

The US government employs more than two million civilian workers, as well as uniformed military personnel and federal contractors.

Civil servants deemed "non-essential" would be asked to stay home during a shutdown, getting their back pay only on return.

- Ukraine aid on the chopping block? -

With Republicans holding the line on their demands for budget cuts, one thing that might not survive current negotiations is President Joe Biden's request for another $24 billion in military and humanitarian aid for Ukraine's fight against Russian invasion.

Ukrainian President Volodymyr Zelensky visited Capitol Hill last week to try and convince the slowly growing number of skeptical Republican members of Congress not to give up on his country.

Democratic Senate leader Chuck Schumer, a major supporter of Biden's pro-Ukraine policies, said Zelensky had told him "if we don't get the aid, we will lose the war."

But the US Congress is deeply divided.

In the Republican-controlled House, a number of deeply conservative lawmakers are insisting on deep budget cuts, including an immediate end of aid to Ukraine.

"When you've got a president who is more concerned about the sovereignty of Ukraine than our own national sovereignty, then you've got a problem," said Representative Chip Roy, one of the hardliners.

In the Senate, the majority Democrats and minority Republicans mostly support the new aid provision, which would come on top of $110 billion released for Ukraine since the invasion began in February 2022.

"Those who call for the end of US assistance to Ukraine are simply setting the stage for even bigger wars in the future," said Republican Senator Lindsey Graham.

- Markets sink without a deal -

Both parties in the Senate have supported a short-term budget fix that would give time for more extended negotiations.

But that is unlikely to be ready for a vote before the Saturday deadline, and House Republicans have not shown support for it.

The shutdown prospect comes just four months after the United States came dangerously close to defaulting on its debt, which could have had disastrous consequences for the American economy and beyond.

The hardline Republicans in the House were also responsible for that push to the precipice.

US stock markets sank more than one percent on Tuesday amid the prospect for a government shutdown.

On Monday Moody's -- the only major ratings agency to maintain its maximum score for US sovereign debt -- warned that the latest drama could threaten its top tier status.

(P.Werner--BBZ)