Distinct from its concerns abroad, the United States’ most urgent domestic confrontation is over the national budget. The White House and the Republicans are at loggerheads, and keeping government running will be a challenge come the new fiscal year beginning on October 1.
The real deadline is closer to late October, when the country is projected to hit its debt ceiling and the federal government will run out of money. If Congress doesn’t lift the ceiling, the US government will be forced to default. The administration has warned repeatedly of the consequences of this, insisting on a no-strings increase. Republicans have demanded spending cuts.
Bipartisan voices are predicting a grave outcome if it comes to that.
Roberton Williams Roberton Williams, with the Urban Institute/Brookings Tax Policy Center, told euronews: “One of the things that is going to happen is, if we get to that point and we really don’t have any agreement on raising the debt ceiling, credit markets will be in turmoil. People won’t know what to do about government bonds, whether they are good or not, whether they should buy more. What will happen on the international and national credit markets is an open question, but it’s not going to be anything good.”
Further complicating things: a group of about 130 conservative Republicans in Congress, supported by pressure groups like the Heritage Foundation, are only willing to pass a budget if funding for the controversial Obamacare health law is cut out of it.
Very conservative voices are firm and clear they will not budge from that position.
The Heritage Foundation’s Chris Jacobs said: “Congress should pass a spending bill that funds the entire federal government, that would be roads, that would be the National Park Service, that would be the military, all the essential functions of government except for ‘Obamacare’. And if President Obama or liberal Democrats in the Senate want to try to block that, that is, sort of, on them. No conservatives that want to stop ‘Obamacare’ want to shut down the federal government.”
Defunding Obamacare would mean not letting federal funds be used for provisions in the health law. Democrats consider it Obama’s historic signature achievement, not up for renegotiation, as Congress passed it, he signed it and the Supreme Court confirmed it.
Our Washington correspondent Stefan Grobe summed up: “Most observers believe that eventually the conflict will be solved the American way: by a last-minute short-term compromise that pleases nobody. But by then, the battle of the budget may have caused a lot of political casualties.”