With hours to go before a midnight deadline, Congress scrambled to avoid a government shutdown on Thursday. As speculated, the Senate passed a short-term funding package to keep the government open until December 3, giving legislators more time to find an agreement on the budget.
The bill would grant $6.3 billion to assist Afghan refugees to resettle in the United States and $28.6 billion to help communities recover from catastrophes such as hurricanes and wildfires. The disaster money is meant to assist towns across the nation to recover from natural disasters such as Hurricanes Ida, Delta, Zeta, and Laura, wildfires, and winter storms.
If the House doesn’t approve the bill, the government could shut down. A government shutdown might result in federal workers being furloughed and some services being suspended. And although the Biden administration has stated that a shutdown would have little effect on public health activities, it could create significant problems as the US attempts to combat the virus.
Even if the government shutdown is avoided, Congress still faces another looming issue. Before October 18, lawmakers must increase or suspend the debt ceiling to avoid a default on US debt. A default could result in job losses, a stock market crash, and general economic calamity.
Democrats attempted to finance the government while also suspending the debt ceiling in the same bill. However, Republicans in the Senate voted against the bill. As the two political parties sort their differences out, the country will be waiting to see what happens.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.