Although the Senate voted Friday to approve legislation that would keep the government open until Nov. 15, there could still be a shutdown if the U.S. lawmakers don’t move forward quickly.
To avoid a shutdown House Republicans and Senate Democrats must compromise on a final bill by Tuesday morning or thousands of federal workers will not be allowed to report to work. Republicans in the House are scheduled to meet Saturday to decide on a course of action, according to news reports.
On Friday the Senate voted 54 to 44 to pass a government-funding bill, but stripped out a provision from House Republicans that would have gutted President Barack Obama’s health-care reform.
The latest round of partisan bickering over the government’s spending and debt is bad for the economy and funding delays could damage growth, analysts say. A shutdown would lead to more than 1 million federal workers being furloughed, noted TD Economics analysts.
“For every week that it goes on, quarterly economic growth would be cut by around 0.2 percentage points (annualized),” according to a TD Economics research note.
Friday morning, a gauge of sentiment showed that consumers turned gloomier this month, and they were uneasy about spending battles in Washington.
“Although consumers have come to expect the congressional theater that is now playing, they don’t expect the president and Congress to be careless enough to allow a government shutdown due to intransigence on the federal budget and debt ceiling,” said Richard Curtin, the sentiment survey’s chief economist. “Consumer confidence is fragile enough without this added source of economic uncertainty.”
–Ruth Mantell and Greg Robb