Deadline Looms: Less than 18 hours remain for US shutdown resolution - here's what we know

U.S. House Republicans meet at the U.S. Capitol ahead of a looming government shutdown in Washington (Photo: Reuters)

The United States is on the brink of a fourth partial federal government shutdown after hard-right Republicans in Congress rejected a longshot effort to keep offices open. This fourth partial shutdown in the history of the US can affect Americans' daily lives as services like air travel, military, national security etc. can be impacted.

US government services would be disrupted and hundreds of thousands of federal workers furloughed without pay if Congress failed to provide funding for the fiscal year starting October 1.

With less than 18 hours left till October 1 morning for President Joe Biden to sign the spending bill for next fiscal, if it happens, the lawmakers return to the US Congress. Reports suggest that officials are still scrambling to avert the shutdown with no clear path to resolving a squabble that appears likely to close wide swaths of the federal government, from national parks to financial regulation.

Here's what we know so far on US shutdown developments:

--Let's first recall that shutdowns have occurred before in the United States, with limited market impact. However, worries loom for the upcoming halt as they could delay economic data releases and affect the Federal Reserve's decisions. A prolonged shutdown may negatively affect the US debt rating.

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--Ahead of this, the US Senate met in a rare Saturday session to advance its own bipartisan package that is supported by Democrats and Republicans and would fund the government for the short-term, through November 17.

--However, even if the Senate can rush to wrap up its work this weekend to pass the bill, which also includes money for Ukraine aid and U.S. disaster assistance, it won't prevent an almost certain shutdown amid the chaos in the House.

-- Once the shutdown hits, hundreds of thousands of federal employees will lack the funding to do their jobs if the two chambers do not send a spending bill for Democratic President Joe Biden to sign into law by 12:01 a.m. (0401 GMT) on October 1.

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--Most of the government's 4 million-plus employees would not get paid, whether they were working or not.

--Federal agencies have already drawn up detailed plans that spell out what services must continue, like airport screening and border patrols, and what must shut down, like scientific research and nutrition aid to 7 million poor mothers.

--Reuters reported that House Speaker Kevin McCarthy said the chamber might try to rely on Democrats to help pass a stopgap bill that would continue funding at current levels, even though that could prompt a challenge to his leadership from hardliners. He did not provide further details.

--Rating agency Moody's also sounded alarm saying that such a shutdown would harm the country's credit, a stern warning coming one month after Fitch downgraded the US by one notch on the back of a debt ceiling crisis.

--The standoff comes just months after Congress brought the federal government to the brink of defaulting on its $31.4 trillion debt. The drama has raised worries on Wall Street, where Moody's ratings agency has warned it could damage US creditworthiness.

(With agency inputs)