The US government shut down from October 1st.

The US government will shut down on October 1, US time, because the US Congress failed to reach an agreement on a temporary budget…

Illustration photo – Photo: Reuters.

According to CNBC, Republicans and Democrats in the US Congress are determined not to give in to each other’s positions on a temporary budget bill to prevent a government shutdown. The thorniest issue is the Democrats’ insistence on extending the enhanced tax credit policy of the Affordable Care Act, while the Republicans do not agree.

Democratic Senator John Fetterman of Pennsylvania sided with Republicans in supporting the Republican-led stopgap funding bill. “This is a sad day for our country,” he said in a statement on September 30. “The government will shut down at midnight.”

Business Rountable, a group of leading US business CEOs, called for a quick solution to reopen the US government. “Keeping the government funded is a core duty of Congress. A government shutdown would create uncertainty, disrupt critical services and hurt American businesses, workers and families,” Business Rountable CEO Joshua Bolten said in a statement.

Meanwhile, through the media, lawmakers from both parties continue to blame each other for the government shutdown. The US Congressional Budget Office (CBO) estimates that this shutdown will cause 750,000 federal workers to be temporarily laid off, and these people will suffer a total loss of about $400 million in wages per day.

Previous government shutdowns have been seen as having little impact on the economy. However, this time could be different, as President Donald Trump has threatened to lay off scores of federal workers if the government shuts down – a move that could worsen an already weak US labor market.

A government shutdown could also lead to a downgrade of the country’s credit rating. Moody’s downgraded Washington’s credit rating by one notch in May.

Another issue is the potential delay of key economic reports. The Labor Department said on Monday that it may have to indefinitely postpone the release of its September nonfarm payrolls report if the U.S. government shuts down. Such a delay would make the outlook for monetary policy and the U.S. economic picture more uncertain.