Portugal Colonial - US government hours from shutdown, as lawmakers try last-ditch solutions

The closure of all but critical government services, set to start after midnight Saturday (0400 GMT Sunday) if lawmakers fail to reach a deal, would be the first since 2019 -- immediately delaying salaries for millions of federal employees and military personnel.

The two chambers of Congress are deadlocked, with a small group of Republicans in the House of Representatives pushing back against temporary funding measures that would at least keep the lights on.

House Speaker Kevin McCarthy said he would hold a vote Saturday on a fresh measure that would keep the government open for another 45 days at current spending levels but without any aid for Ukraine.

The bill would require significant Democratic support to pass.

If President Joe Biden wants to lobby against it, "then the shutdown is on him," McCarthy said.

The White House insists the real negotiation should be between McCarthy and Republican hardliners who scuppered a similar temporary funding measure on Friday, underlying a growing sense of chaos inside the party ahead of next year's presidential election.

"There are those in Congress right now who are sowing so much division, they’re willing to shut down the government tonight," Biden said Saturday morning on X, formerly known as Twitter. "It's unacceptable."

The Democrat-controlled Senate was expected to vote on its own stopgap bill later Saturday – one that does include funding for Ukraine.

Asked whether he was concerned about hard-line Republican threats to remove him from office if a bill is pushed through the House with Democratic support, McCarthy answered: "If somebody wants to remove (me) because I want to be the adult in the room, go ahead and try."

- Big question on Ukraine -

While all critical government services would remain functioning, a shutdown would mean the majority of national parks, for example -- from the iconic Yosemite and Yellowstone in the west to Florida's Everglades swamp -- would be closed to public access beginning Sunday.

With student loan payments resuming in October, officials also said Friday that key activities at the Federal Student Aid office would continue for a couple of weeks.

But a prolonged shutdown could cause bigger disruptions.

A shutdown "unnecessarily" places the world's largest economy at risk, White House National Economic Council Director Lael Brainard told CNBC.

Risks that could percolate through the wider economy include air travel delays, with air traffic controllers asked to work without pay.

Treasury Secretary Janet Yellen warned a closure could also delay infrastructure improvements.

"In the immediate term, a government shutdown will only reduce GDP by 0.2 percentage points each week it lasts," said a report released Friday by the Center for Strategic and International Studies, a think tank, adding that a shutdown would "undermine the United States' overall credibility as a commercial partner."

The mess casts a growing shadow over Biden's policy of arming and funding Ukraine in its desperate war against the Russian invasion. For Republican hardliners behind the derailment of a new budget, stopping aid to Ukraine is a key goal.

Most Republican members of Congress continue to support US backing for Ukraine, but the shutdown will at minimum raise questions over the political viability of renewing the multibillion-dollar flow of assistance.

P.Cavaco--PC