U.S. Congress faces uncertainty over a resolution to avoid shutdown.

This week, the US Congress is facing an urgent fiscal crisis: If a Continuing Resolution (CR) is not passed by Friday, the federal government risks a shutdown. Although Republican leaders express optimism, disagreements over the budget and uncertainties on key issues like the Farm Bill and healthcare reform make the outlook unclear.

Challenges and Uncertainty of the Continuing Resolution
The Continuing Resolution aims to provide short-term funding for the federal government to avoid a shutdown. House Speaker Mike Johnson stated that the temporary bill is "nearly complete," and House Majority Leader Steve Scalise also mentioned that the agreement is "about to be finalized," with the bill's text possibly being released today. However, long-standing budget allocation differences between parties make the agreement's prospects uncertain.

Farm Bill at the Center of Controversy
One point of contention is the continuation of the Farm Bill. The initial plan involved reallocating funds from the Inflation Reduction Act (IRA) to directly assist farmers. Yet, Johnson opposes this, fearing that touching IRA funds may displease former President Trump, who has stated that he would repeal the IRA if he returns to the White House.

Meanwhile, Democrats have proposed several conditions, including requiring the federal government to cover the costs of rebuilding the Francis Scott Key Bridge in Baltimore and pushing for trade agreements allowing Haitian apparel and textiles to enter the US duty-free. These proposals further complicate negotiations.

Unclear Future for Healthcare Reform and Other Bills
Besides the budget bill, Congress needs to resolve the fate of several important legislations. A comprehensive healthcare reform agreement is still pending, involving the restructuring of pharmacy benefit managers, extending Medicare telehealth flexibilities, and reauthorizing the SUPPORT Act passed in 2018 to address the opioid crisis. Progress on these issues needs to occur within limited time.

Time Pressure on Procedures Forces “Magical” Maneuvers by Congress
If Congress releases the draft funding bill today, the House could vote as early as Thursday, following the 72-hour review rule. This would leave the Senate with very limited time for review and voting, forcing it to rely on its trademark "magical" maneuvers to send the bill to President Biden for signature at the last moment.

Additionally, Johnson is striving to prevent a "Christmas Tree Bill" at the end of the year, which typically is rushed through and filled with additional demands from interest groups, sparking further controversy.

Intensifying Pressures Within and Outside the Party
Johnson's position is particularly challenging: While trying to gain Democratic support to push the temporary budget bill, he is also facing opposition within the Republican Party. Fierce debates and mutual accusations are expected in Congress. Meanwhile, Senate Republicans and Trump have expressed opposition to a government shutdown, suggesting a smooth transition to 2025 to avoid greater economic and political turmoil.

Future Outlook
As the deadline approaches, whether the Continuing Resolution can pass smoothly will be a focal point for markets and the public. If Congress fails to reach an agreement at the last moment, the US government will once again face the risk of partial shutdown, further exacerbating political uncertainty and economic pressure.

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