A top official at the U.S. Chamber of Commerce has expressed alarm over the possibility of a partial government shutdown next week. This concern arises from news that a key deal on spending levels might be reversed.
House Speaker Mike Johnson, a Republican from Louisiana, and Senate Majority Leader Chuck Schumer, a Democrat from New York, had reached an agreement on top-line spending levels for the current fiscal year last Sunday. This had led analysts to feel more optimistic about the chances of a divided Congress avoiding a shutdown.
However, on Thursday, hard-line House Republicans stated their intention to push Speaker Johnson to renegotiate the agreement. While the speaker acknowledged having conversations, he has not made any commitments as of now.
These recent developments have left Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce, feeling rather discouraged. He expressed his concerns during a news conference held in conjunction with his lobbying group’s annual State of American Business event.
The Potential Consequences of Revisiting the Government Shutdown Deal
The recent news suggesting a revision of the agreement between the speaker and Leader Schumer, along with the minority leaders, has sparked concerns regarding a potential government shutdown. This development has added pressure to an already time-sensitive situation, as there is a looming deadline to either pass a continuing resolution or secure the necessary spending bills. The introduction of reopened negotiations substantially amplifies the likelihood of a shutdown.
To mitigate the possibility of a shutdown, the chamber intends to escalate its efforts in highlighting the detrimental effects it would have on various sectors. As a dominant force in lobbying, having spent $50 million in the first three quarters of 2023, according to OpenSecrets.org, the chamber’s influence carries significant weight.
It is widely recognized on Capitol Hill that a government shutdown results in losses for all involved parties. The repercussions for American families and businesses are far-reaching, prompting the business community, with the chamber leading the charge, to emphasize these real-world consequences. With each passing day, apprehension regarding a shutdown continues to grow.
Funding Deal Deadline Looms for Senate and House
The Senate, controlled by Democrats, and the House of Representatives, controlled by Republicans, have until January 19th to reach a funding deal in order to avoid a partial shutdown. In November, Congress passed a two-tiered bill that provided funding extensions for certain agencies and programs until January 19th, with others receiving funding until February 2nd.
Market Reaction: Stocks Dip Amid Higher Inflation
On Thursday, U.S. stocks (SPX, DJIA) experienced a slight decline as investors digested an unexpectedly higher inflation reading.
Related: What is the Impact of Government Shutdowns on Markets?