September 30 could be a consequential day for the US economy if two major negotiations don’t get hammered out in time.
Congress must pass a stopgap spending bill by the last day of this month to avoid a partial government shutdown. September 30 is also the deadline for the International Longshoremen’s Association and several East Coast and Gulf Coast ports to strike a contract.
If a government shutdown happens and/or a strike is not averted, substantial chunks of the US economy could impacted a little more than a month before the 2024 presidential election.
Of course, there’s still time for members of Congress to negotiate a stopgap spending bill. On Wednesday, September 18, the House of Representatives rejected a bill brought by GOP House Speaker Mike Johnson that would have funded the government for another six months. On Thursday, Johnson and other GOP leaders signaled that they were interested in keeping the government open.
There’s also time for the International Longshoremen’s Association to hash out a contract with the United States Maritime Alliance — though, as of Wednesday, there had been no negotiations thus far, nor are any on the books, The Wall Street Journal reported this week.
The two potential crises are unrelated beyond sharing an ominous deadline. Here’s what’s happening with each.
A government shutdown
The rejection of Johnson’s plan on Wednesday ratcheted up tensions in Congress as the September 30 deadline draws ever nearer.
The 220-202 vote saw fourteen Republicans join with Democrats to block the bill, which is opposed by both the White House and Democrats in the Senate.
While the bill had been expected to fail for days, former President Donald Trump likely didn’t help Johnson’s cause by pushing Republicans to include the entirety of a voting registration bill that requires proof of citizenship to vote in national elections or move forward with a shutdown.
As Johnson is now forced to work across the aisle, Democrats will likely propose a three-month continuing resolution, The Washington Post reported. On Thursday, The Wall Street Journal reported that GOP leaders were in discussions over a bill that would keep the government open until mid-December.
The fallout of a pre-presidential election government shutdown would be bad for both parties, but Senate Minority Leader Mitch McConnell told reporters on Wednesday that he thinks Republicans would bear the brunt of the blame.
Should Congress fail to pass a bill by September 30, the government would be partially shut down on October 1, meaning federal agencies that were not funded would discontinue all non-essential work until new funding legislation is passed and signed into law.
During a shutdown, nonessential government workers are furloughed, social services programs like Social Security, Medicare, and veteran’s benefits may experience disruptions, and national parks close to the public.
The 2018-2019 shutdown that lasted 35 days reduced GDP by $11 billion, according to an estimate from the Congressional Budget Office.
The previous three shutdowns, which occurred in 2013, 2018, and again in 2018-2019, cost taxpayers nearly $4 billion, according to the Senate Appropriations Committee.
A shutdown of the docks
Meanwhile, the likelihood that 45,000 dockworkers at ports spanning Maine to Texas grows likelier with each day.
The dockworkers’ contract expires at the end of this month, and the International Longshoremen’s Association has said its members will strike if a deal is not met.
The union is asking for a 77% wage increase over six years, The Journal reported.
The looming economic threat is prompting US importers to get a jump-start on holiday shipping, with millions of dollars worth of items being rushed to try to avoid the possible walkout, according to the outlet.
A strike would likely lead to mass cargo diversions to West Coast ports, which could clog up gateways, per The Journal.
Should these high-traffic ports cease operations ahead of the peak holiday season, the economic consequences for retailers and consumers could be dire.
A walkout could result in mass delays, increased shipping costs, and potential shortages, all of which could affect the broader economy, according to the Retail Industry Leaders Association.
Some analysts have predicted that every day of a strike would require five days to deal with the backlog, according to the industry group.
The government could step in to help the two sides reach a deal, though the Longshoremen have said they don’t want government intervention. President Joe Biden could also “request a court order for an 80-day cooling-off period under the Taft-Hartley Act,” according to RILA. This would pause the strike while negotiations continued.
Source link
lol
