Washington Panics As Govt Shutdown Looms
Frantic negotiations are under way in the US to avert a crippling government shutdown within days.
The government is due to run out of money to operate at midnight on Friday unless a deal can be struck to keep it running.
It would be the first government shutdown since 1996 and would have huge political consequences in the midst of the recession.
Members of Congress must agree budgets for government agencies each year and Republicans and Democrats are poles apart on how to cut America's multi-trillion dollar debt.
A short-term funding agreement is likely to be reached before the money runs out at the weekend but that will only delay the crisis for two weeks.
The threat of a shutdown, which would affect all non-essential federal services, says much about the debate raging in Washington over the future direction of America's economy.
Republicans, who now have the majority in the House of Representatives, are under pressure from newcomers supported by the Tea Party movement and have voted for drastic cuts.
In the Senate, where Democrats still hold the majority, that kind of dramatic reduction in government services has no chance of passage.
President Barack Obama has also threatened to veto that proposal.
House Speaker John Boehner said: "We have a moral responsibility to address the problems we face. That means working together to cut spending and rein in government, not shutting it down.
"Americans want the government to stay open, and they want it to spend less money. We don't need to shut down the government to accomplish that."
Two shutdowns in 1995 and 1996, when President Bill Clinton and a new Republican majority in Congress were at loggerheads over the budget, gave the then-president critical momentum on his way to re-election.
Republicans took most of the blame in that dramatic conflict and are moving carefully to avoid a shutdown this time around.
Mr Obama has urged congress to find a solution quickly.
He knows a major fight still looms over his budget for next year, which is due to kick in on October 1.
He claims it will save a trillion dollars over the next decade but does not tackle problems with expensive and controversial social welfare programmes.
http://news.sky.com/skynews/Home/Wo...ce_To_Avert_A_Government_Shutdown_Within_Days
Frantic negotiations are under way in the US to avert a crippling government shutdown within days.
It would be the first government shutdown since 1996 and would have huge political consequences in the midst of the recession.
Members of Congress must agree budgets for government agencies each year and Republicans and Democrats are poles apart on how to cut America's multi-trillion dollar debt.
A short-term funding agreement is likely to be reached before the money runs out at the weekend but that will only delay the crisis for two weeks.
The threat of a shutdown, which would affect all non-essential federal services, says much about the debate raging in Washington over the future direction of America's economy.
Republicans, who now have the majority in the House of Representatives, are under pressure from newcomers supported by the Tea Party movement and have voted for drastic cuts.
In the Senate, where Democrats still hold the majority, that kind of dramatic reduction in government services has no chance of passage.
President Barack Obama has also threatened to veto that proposal.
House Speaker John Boehner said: "We have a moral responsibility to address the problems we face. That means working together to cut spending and rein in government, not shutting it down.
"Americans want the government to stay open, and they want it to spend less money. We don't need to shut down the government to accomplish that."
Two shutdowns in 1995 and 1996, when President Bill Clinton and a new Republican majority in Congress were at loggerheads over the budget, gave the then-president critical momentum on his way to re-election.
Republicans took most of the blame in that dramatic conflict and are moving carefully to avoid a shutdown this time around.
Mr Obama has urged congress to find a solution quickly.
He knows a major fight still looms over his budget for next year, which is due to kick in on October 1.
He claims it will save a trillion dollars over the next decade but does not tackle problems with expensive and controversial social welfare programmes.
http://news.sky.com/skynews/Home/Wo...ce_To_Avert_A_Government_Shutdown_Within_Days
