Republicans block government funding: US default draws nearer

Enlarge image

US Capitol in Washington (archive image)

Photo: AP / dpa

Exactly ten years ago, a comparable dispute had already escalated.

And the danger of a partial standstill of government business will also grow in the USA in 2021.

The Republicans blocked a formal vote in the US Senate on Monday evening (local time) on a proposal that was intended to secure government funding beyond the end of the budget year this Thursday.

The new financial year starts on October 1st, this Friday.

If no budget regulation has been decided by then, parts of the government will shut down.

This means that some state employees would have to be given compulsory leave or work temporarily without pay.

Depending on how long such a situation lasts, certain government services could be restricted or payments delayed.

Such "shutdowns" by parts of the government occur more often in the USA.

However, the administration of US President Joe Biden is determined to avoid this.

The House of Representatives passed the government's temporary funding scheme last week with the vote of the Democrats.

In the Senate, however, the Republicans resisted.

They complained that the bill also provides for the debt ceiling to be suspended for the time being - which they reject.

According to Treasury Secretary Janet Yellen, however, if Congress does not raise the debt ceiling, the US government is at risk of default in the coming month.

It is not possible to give an exact day, but the government will run out of money "in the course of October," Yellen warned in early September.

If the government were unable to service its debt in October, the US economy and financial markets around the world were threatened with "irreparable damage."

Republican McConnell shows no nerve

The background is a power game between Democrats and Republicans.

Neither party wants to be responsible to the electorate for the US to raise its statutory debt limit one more time.

The Democrats argue that Donald Trump amassed nearly $ 8 trillion in additional debt.

Most recently, they insisted that the opposition had to go along - as the Democrats themselves did under Trump.

The Republicans, on the other hand, do not want to miss the chance to brand the Biden administration as an unsound spendthrift.

Mitch McConnell, Senate Republican leader, shows no nerve.

He insists that the Democrats must decide the debt increase alone.

Once before, in 2011, the United States had slid along the brink of insolvency for weeks because McConnell and his fellow party members became stubborn.

Both sides have maneuvered themselves into the corner, and the longer the blockade, the more the unrest on Wall Street and the other financial markets of the world grows.

jok / dpa