U.S on the brink of government shutdown - Angel Broking

Just hours remain for a U.S. Congress deadline to pass a stop gap measure failing which a federal government shutdown is imminent. The Republicans and Democrats appear unwilling to renege on their terms and break the impasse before the deadline.

The Republican-controlled House of Representatives on Sunday passed a measure that ties government funding to a one-year delay of President Barack Obama's landmark healthcare restructuring law. It would fund the government through December. But the Senate Democrats have are poised to reject it. If a stop-gap spending bill for the new fiscal year is not passed before midnight on Monday, government agencies and programs deemed non-essential will begin closing their doors for the first time in 17 years. In a government shutdown, spending for functions considered essential, related to national security or public safety, would continue along with benefit programs such as Medicare health insurance and Social Security retirement benefits for seniors.

The next big political conflict is estimated to come up by mid-October to raise the government's borrowing authority. A failure by the Congress to raise the USD 16.7 trillion debt ceiling would compel the United States to default on some of its payment obligations. The event would have an adverse fall out for the global economy. In 2011, the debt ceiling was raised in a deal that simultaneously reduced deficit in the economy by USD 2.1 trillion.

Source : Equity Bulls

Keywords