Lukewarm support for new plan to avoid US shutdown

The plan by US House of Representatives speaker Mike Johnson to avoid a partial government shutdown has secured tentative support from top Senate Democrat Chuck Schumer, amid some republican pushback.

Senate Majority Leader Schumer, whose support would be critical to pass the measure to head off a government shutdown beginning on Saturday, said he was "pleased" that Johnson's proposal did not include sharp spending cuts.

"The speaker's proposal is far from perfect, but the most important thing is it refrains from making steep cuts," said Schumer, who stopped short of backing the idea.

However, before the bill can move to the Senate, it will need to clear the House, where at least seven of Johnson's fellow Republicans signalled opposition to his two-step continuing resolution, or "CR," which would keep federal agencies operating at current funding levels.

Representative Chip Roy, a prominent hardliner, blasted the measure for its absence of spending cuts and conservative policies, and because it would extend food assistance for poor families to September 30. Without changes, the Texas Republican said he would oppose efforts to bring the bill to the floor.

Top House Democrat Hakeem Jeffries said he was "carefully evaluating" Johnson's proposal.

Despite an unusual structure that sets different funding deadlines for different parts of the government, Johnson's CR amounts to a "clean" bill without spending cuts, policy provisions or other strings attached - the kind of measure that led to the ousting of his predecessor, Kevin McCarthy, by his right flank.

Congress is engaged in its third fiscal showdown this year, following a months-long spring standoff over the nation's more than $31 trillion in debt, which brought the federal government to the brink of default.

The ongoing partisan gridlock, accentuated by fractures within the narrow 221-212 House Republican majority, led Moody's late on Friday to lower its US credit rating outlook to "negative", as it noted that high interest rates would continue to drive borrowing costs higher. The nation's deficit hit $1.695 trillion in the fiscal year ended Sept. 30.

The plan would need to pass the Democratic-majority Senate and be signed into law by President Joe Biden by midnight on Friday to avoid disrupting pay for up to 4 million federal workers, shuttering national parks and hobbling everything from financial oversight to scientific research.

Johnson's plan seems geared to find support from two warring Republican factions: hardliners who wanted different funding deadlines for different federal agencies and centrists who called for a "clean" vehicle without spending cuts or conservative policy riders that Democrats would reject.

His bill would extend funding for military construction, veterans benefits, transportation, housing, urban development, agriculture, the Food and Drug Administration and energy and water programs through Jan. 19. Funding for all other federal operations, including defence, would expire on Feb. 2.

The White House over the weekend blasted the plan as chaotic, but there were also indications that it could provide a path forward for Congress, given Johnson's decision to assign defence spending to February 2. Democrats had worried that Republicans would put defence and other party priorities in the first tranche and then let the remaining programs shut down.

"This latest proposal is very much untested," said White House spokesperson Karine Jean-Pierre said on Monday, adding that they would watch lawmakers negotiations play out.