Looming U.S. Shutdown: Financial Turmoil or Political Standoff?

Much of the U.S. government risks temporary shutdown as Congress struggles to pass a spending bill. President-elect Trump is advocating for addressing the debt ceiling to avoid future complications. The shutdown could impact services nationwide, with significant economic consequences if prolonged.

An extensive shutdown of the U.S. government could occur if Congress fails to pass a crucial spending bill by midnight on Friday. This potential closure comes amid mounting pressure from President-elect Donald Trump, who is urging lawmakers to tackle the nation's debt ceiling before his inauguration on January 20.

The current temporary funding expires this Saturday, and although there is a proposed legislation to extend it until March 14, Trump has urged fellow Republicans to oppose it. Should Congress not reach a consensus, a substantial portion of the government will face closure, affecting countless services and the economy.

Historically, government shutdowns have led to significant disruptions, including furloughs for federal workers and halted services. Goldman Sachs estimates a GDP growth reduction of 0.15 percentage points per shutdown week, with economic repercussions gaining momentum if paychecks are missed.

(With inputs from agencies.)