US Senate, House hold procedural votes as partial government shutdown looms

With a partial shutdown of the US government just three days away, the Democratic-controlled Senate is expected to take a procedural vote on Thursday on a bipartisan short term spending measure that has already been rejected by Republican House Speaker Kevin McCarthy.

Meanwhile, the Republican-controlled House is set to continue voting on amendments to four appropriations bills that have no chance of becoming law, and would not alone prevent a shutdown even if they did.

Congress must pass legislation that Democratic President Joe Biden can sign into law by midnight Saturday (0400 GMT on Sunday) to avoid furloughs of hundreds of thousands of federal workers and halting a wide range of services, from economic data releases to nutrition benefits, for the fourth time in the last decade.

House Republicans, led by a small faction of far-right members in the chamber they control by a 221-212 margin, have rejected spending levels for fiscal year 2024 set in a deal McCarthy negotiated with Biden in May.

The agreement included $1.59 trillion in discretionary spending in fiscal 2024. House Republicans are demanding another $120 billion in cuts, plus tougher legislation that would stop the flow of immigrants at the US southern border with Mexico.

The funding fight focuses on a relatively small slice of the $6.4 trillion US budget for this fiscal year. Lawmakers are not considering cuts to popular benefit programs such as Social Security and Medicare.

McCarthy is facing intense pressure from his caucus to achieve their goals. Several hardliners have threatened to oust McCarthy from his leadership role if he passes a spending bill that requires any Democratic votes to pass.

"I think that the Speaker is making a choice between the speakership and American interests," Biden told a group of donors at a fundraiser in San Francisco on Wednesday.

McCarthy, for his part, suggested late on Tuesday that a shutdown could be avoided if Biden would negotiate on border issues.

"Call us up, let's sit down and get this done before the end of the day," McCarthy said.

Former President Donald Trump, who uses the slogan "Make America Great Again" or MAGA, has taken to social media to push his congressional allies towards a shutdown.

The Senate's stopgap funding measure would extend federal spending until Nov. 17, and authorizes roughly $6 billion each for domestic disaster response funding and aid to Ukraine to defend itself against Russia.

The measure passed in an initial procedural vote with strong bipartisan support on Tuesday.

"This is not an impossible puzzle to solve," Senate Majority Leader Chuck Schumer told reporters on Wednesday. "Speaker McCarthy needs to stop letting the MAGA radicals drive his decisions, and do the obvious and sensible thing - follow the Senate's lead and pass a bipartisan CR (continuing resolution appropriations legislation)."

Growing financial crisis

Credit agencies have repeatedly warned that brinkmanship and political polarization are harming the United States' financial outlook. Moody's, the last major ratings agency to rate the US government "Aaa" with a stable outlook, said on Monday that a shutdown would harm the country's credit rating.

Fitch's, another major ratings agency, already downgraded the US government to "AA+" after a debt ceiling crisis in June.

Most of Congress - including many Senate Republicans - has largely rejected House Republicans' attempts to make the situation at the border with Mexico the focus of the shutdown.

"We can take the standard approach and fund the government for six weeks at the current rate of operations, or we can shut the government down in exchange for zero meaningful progress on policy," Senate Minority Leader Mitch McConnell, the chamber's top Republican, said on Wednesday.

Representative Henry Cuellar, a conservative Democrat from Texas who serves as ranking member of the Homeland Security Subcommittee, criticized Republicans in a Wednesday committee hearing on an appropriations bill that would deal with many aspects of the border.

"I agree there are migration issues we need to address," he said. "But this bill relies on outdated strategies that we know do not work."

The House is expected to vote on its own short term funding measure on Friday.

However, it will likely include border measures that will not pass the Senate, meaning the risk of a shutdown remains high.