With shutdown looming, US Senate offers short-term budget fix

The US Senate drafted a last-ditch short-term budget proposal Tuesday as time was running out on Congress to avoid a partial government shutdown.

With just days left before the 30 September deadline, both Democratic Senate Majority Leader Chuck Schumer and Republican minority leader Mitch McConnell endorsed the draft, which would keep the government open until 17 November.

But there was no immediate indication that the warring factions of House Republicans, who have forced the showdown over government funding, would take it up if passed in the Senate.

"Shutting the government down over a domestic budget dispute doesn't strengthen anyone's political position," McConnell said.

"It just puts important progress on ice. And it leaves millions of Americans on edge," he said.

Frozen services, no paychecks

If a deal isn't reached by Saturday, hundreds of thousands of federal employees could be furloughed, curtailing a wide swath of government services.

That could mean welfare recipients don't get payments they depend on, and airport operations could slow, snarling travel plans for millions.

Some employees would continue to work — like the military and others deemed essential — but would not get their paychecks, until a budget is finally passed.

Democratic President Joe Biden placed the blame on a small group of "extremist" Republican lawmakers in the House, saying he had previously reached a deal on the budget with Senate Republican leader Mitch McConnell.

The House hardliners "are determined to shut down the government," Biden said in a video message.

Meanwhile the Republican mainstream "refuse… to stand up to the extremists in their party," Biden said.

"So now everyone in America could be forced to pay the price," he said.

Ukraine aid on the chopping block

The Senate draft confirmed that Ukraine, which has been battling Russian invaders for more than a year and a half, could find its lifeline of US arms and economic aid under threat.

Last week Ukrainian President Volodymyr Zelensky visited Capitol Hill to try to convince the slowly growing number of skeptical Republican members of Congress not to give up on his country.

But after Biden asked Congress for $24 billion for Kyiv, the short-term Senate measure released Tuesday allocated just $6.1 billion.

But hardliners in the House have said they don't want any more money going to Kyiv, after the $110 billion already provided since the invasion began in February 2022.

"When you've got a president who is more concerned about the sovereignty of Ukraine than our own national sovereignty, then you've got a problem," said Republican Representative Chip Roy, referring to Biden.

Markets sink without a deal

Even if the Senate passes the measure quickly, there were doubts that the House could act quickly enough to avoid at least a short shutdown.

The prospect of the world's largest economy unable to produce a government budget comes just four months after Washington came dangerously close to defaulting on its debt due to political deadlock.

That could have had disastrous consequences for the American economy and beyond.

US stock markets sank more than one percent on Tuesday amid the prospect of a government shutdown.

On Monday, Moody's — the only major rating agency to maintain its maximum score for US sovereign debt — warned that the latest drama could threaten its top-tier status.