Ex-Obama adviser: Government shutdown 'very possible' unless Republicans stick to agreement

Although President Joe Biden and House Speaker Kevin McCarthy (R-CA) avoided a debt default earlier this year by reaching a consensus, some Republican lawmakers continue to resist the agreement.

However, the lawmakers must agree on a budget for the 2024 fiscal year by September 30 to prevent a shutdown, which The Washington Post reports would "affect hundreds of thousands of federal workers."

MSNBC's Inside with Jen Psaki host Jen Psaki spoke with former National Economic Council director and senior advisor to ex-President Barack Obama Brian C. Deese Sunday about what ultimately would cause a shutdown in the coming months.

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Psaki said, "In the many foxholes I've been with you, a lot of them have been legislative battles. And while Congress is on a big break right now in August, they're gonna come back and the government could shut down," asking Deese, "What is that going to come down to in your assessment? And how worried are you about that happening?"

The former Obama adviser replied, "Well, look, Congress and the president avoided the most dangerous economic issue earlier this summer," Deese said. "And the fact that the debt limit was even not the table was a self-inflicted threat to the economy, but they found a way through it. And the way they found a way through it was to agree on funding levels for the next year. So I think what should happen is clear, is Congress should come together and write bills consistent with that agreement. They should get that done. They should pass bills, and they should move on. What I think will happen is we're gonna have a lot of drama about fighting about funding, and ultimately we're likely to see the government get funded in small increments in delays which is not efficient but we have come to get used to."

Deese continued, "Could we have a government shutdown? I think it is very possible and ultimately it's going to come down to whether the Republican Caucus can accept and reflect the fact that their leadership agreed to a set of funding levels and then operate against those. And then of course, as you and I have lived through on multiple occasions, there's always the risk that some unrelated ideological issue gets injected into the funding process and blows it all up. I hope that won't happen; I think it very well might. But it terms of the overall macroeconomy, the biggest risk was the debt limit and we've taken it off the table for the time being."

ThePostreports:

A government shutdown would not be as calamitous as breaching the debt ceiling, but it would affect hundreds of thousands of federal workers and, depending on how long it lasts, potentially impact the broader U.S. economy.

Roughly 800,000 federal workers missed two consecutive paychecks during the longest government shutdown in 2019, amid a rift between President Donald Trump and House Democrats over funding for the U.S.-Mexico border wall. A government shutdown can also interfere with critical federal services, such as food safety inspections and the operations of the Internal Revenue Service.

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The Washington Post's full report is available at this link (subscription required).