US Senate bill to fund govt clears procedural hurdle as shutdown looms

The US Senate on Tuesday took a step forward on a bipartisan bill meant to stop the government from shutting down in just five days, while the House sought to push ahead with a conflicting measure backed only by Republicans.

The Senate voted 77-19 to begin debate on a measure that would fund the government through Nov 17, and includes around US$6 billion (RM28.17 billion) for domestic disaster responses and another roughly US$6 billion in aid for Ukraine.

The Republican-controlled House of Representatives, however, planned to push along with its own partisan bill that was unlikely to win support in the Democratic-majority Senate.

The split between the two chambers suggested the federal government was increasingly likely to enter its fourth shutdown in a decade on Sunday, a pattern of partisan gridlock that has begun to darken Wall Street's view of the US government's credit.

Senate majority leader Chuck Schumer, a Democrat, and Senate Republican leader Mitch McConnell worked in tandem to win passage of a bipartisan short-term extension of federal funding at current levels.

House speaker Kevin McCarthy on Tuesday told reporters he would seek approval from his splintered Republicans on a bill that also would temporarily fund the government.

But he intends to attach tough border and immigration restrictions that are unlikely to win support from enough Democrats in the House or Senate to become law.

Democratic President Joe Biden and McCarthy had aimed to head off a shutdown this year when they agreed in May, at the end of a standoff over the federal debt ceiling, to discretionary spending of US$1.59 trillion for the fiscal year beginning Oct 1.

But hardliners to the right of McCarthy have rejected that deal, demanding another US$120 billion in cuts.

McCarthy's measure would restart construction of the US-Mexico border wall, a signature policy of former president Donald Trump, and tighten immigration policies.

Critics have said it would effectively put an end to US asylum for immigrants.

'Shutdowns are bad news'

McCarthy called on the Biden and congressional Democrats to reconsider their opposition. The top Senate Republican pleaded with his House counterpart to embrace the Senate bill.

"Government shutdowns are bad news, whichever way you'd look at it," McConnell said.

McCarthy countered, "Let's do something on the border, keep the government open and show this nation that we can do it right, and solve the rest of our problems as we go."

Hundreds of thousands of federal workers will be furloughed and a wide range of services, from economic data releases to nutrition benefits, will be suspended beginning on Sunday if the two sides do not reach agreement. In Washington, the National Zoo says it would have to curtail its farewell party for three giant pandas before they return to China.

The standoff has caused concern at credit rating agency Moody's, though it is unclear whether it will hurt US creditworthiness, as past shutdowns have not had a significant impact on the world's largest economy.

It is also factoring into the 2024 presidential election, with Trump, the front runner for the Republican nomination, cheering on the shutdown talk.

The cuts that hardliners are pushing for only account for a fraction of the total US budget, which will come to US$6.4 trillion for this fiscal year. Lawmakers are not considering cuts to popular benefit programmes like Social Security and Medicare, which are projected to grow dramatically as the population ages.

Biden himself has called on House Republicans to honour his deal with McCarthy.

Bowing to their concerns, McCarthy has teed up a procedural vote on Tuesday evening to take up four spending bills for the coming fiscal year that reflect conservative priorities and stand no chance of becoming law.

If Tuesday's House vote succeeds, lawmakers would try to pass the four measures out of the House later in the week. They would not fund the full government or prevent a shutdown.

Republicans control the House by a narrow 221-212 majority and have few votes to spare, particularly since some Republican hardliners have threatened to move to oust McCarthy from his leadership role if he relies on Democratic votes to pass legislation.

That could complicate any effort to pass a stopgap spending bill and avert a shutdown.

Congress has shut down the government 14 times since 1981, though most of those funding gaps have lasted only a day or two.