Biden economy chaos as Congress set to shut down amid $2tn federal deficit

According to projected figures from the Committee for a Responsible Federal Budget, the US federal deficit is expected to nearly double this fiscal year ending 30 September.

The figure last year sat around $1trillion (£790billion) but this year is predicted to reach almost $2trillion (£1.58trillion).

In the short run, consumers are tipped to be hit hardest by the spending imbalances with high interest rates, including mortgages, expected to surge.

Despite the current strength of the US economy which would normally reduce the deficit, Americans are expected to be hit with larger interest payments and lower tax receipts.

To mitigate the impending economic disaster, a stopgap will be needed.

“Although the crucial work continues to reach a bipartisan, bicameral agreement on fiscal year 2024 appropriations bills, it is clear that a short-term continuing resolution (CR) will be needed next month,” a spokesperson for the Office of Management and Budget told Axios.

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Senate Minority Leader Mitch McConnell condemned the government funding negotiations as a “pretty big mess”.

He added: “The Speaker and the president reached an agreement which I supported in connection with raising the debt ceiling to set spending levels for next year.

“The House then turned around and passed spending levels that were below that level.”

One hardcore extremist in the Republican party, Marjorie Taylor Greene of Georgia, went as far as to say she would not vote to fund the government this month without an impeachment inquiry into Joe Biden.

However, House Speaker Kevin McCarthy noted that a government shutdown would in fact make it more difficult for Republicans to impeach Biden or pursue investigations into his family.

“If we shut down, all the government shuts it down — investigation and everything else,” he said.

“It hurts the American public.”

Despite the overwhelming $2trillion spending imbalance, the annual deficit in 2021 was in fact much larger.

In the year following the pandemic, the deficit hit a staggering $2.8trillion (£2.22trillion) following unprecedented Covid spending, according to the Congressional Budget Office.

In a statement last week, White House spokesperson Andrew Bates said: “The last thing the American people deserve is for extreme House members to trigger a government shutdown that hurts our economy, undermines our disaster preparedness, and forces our troops to work without guaranteed pay.”