U.S. government will shut down after midnight as Congress fails to pass funding bills

The U.S. government will shut down just after midnight on Wednesday after Congress failed to pass stopgap funding bills.

Republicans and Democrats refused to budge from their opposing positions on a funding deal to avoid a shutdown. A key sticking point was Democrats’ insistence on including the extension of enhanced Affordable Care Act tax credits in any stopgap funding bill.

Office of Management and Budget Director Russell Vought sent a memo to the heads of executive departments and agencies on Tuesday night instructing them to “execute their plans for an orderly shutdown.”

Sen. John Fetterman, a Pennsylvania Democrat who broke ranks with most of the rest of his party’s caucus to support a Republican stopgap funding bill Tuesday, said, “It’s a sad day for our nation.”

“Our government shuts down at midnight,” Fetterman said in a statement.

“I won’t vote for the chaos of shuttering our government,” he said. “My vote was for our country over my party.”

The Business Roundtable, a group of leading U.S. company chief executive officers, called for quick measures to reopen the government.

“Funding the government is an essential responsibility of Congress,” said Business Roundtable CEO Joshua Bolten in a statement.

“A government shutdown would create uncertainty, disrupt critical services and harm American businesses, workers and families,” Bolten said. “Business Roundtable urges Congress to act promptly to avoid a government shutdown.”

Lawmakers took to the airwaves to blame each other for the looming shutdown, which the nonpartisan Congressional Budget Office estimated would result in the furlough of about 750,000 federal employees. 

“The total daily cost of their compensation would be roughly $400 million,” the CBO said in a letter to Sen. Joni Ernst, R-Iowa, who had requested office calculate the financial fallout to federal workers if furloughs happen.

“The number of furloughed employees could vary by the day because some agencies might furlough more employees the longer a shutdown persists and others might recall some initially furloughed employees,” the letter said.

House Speaker Mike Johnson, during an interview on CNBC’s “Squawk Box,” said Democrats “need to come to their senses here, and do the right thing.”

Johnson, R-La., said that top Democrats — Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both of New York — have “painted themselves into a corner” by making policy demands in exchange for passing a funding bill that would keep the government open for at least seven weeks.

Those demands, Johnson said, are irrelevant to the urgent need to pass that continuing resolution.

Democrats are insisting that any continuing resolution to keep the government funded in the near term include an extension of enhanced Affordable Care Act tax credits.

Those credits, which lower the cost of health insurance premiums paid by millions of Americans who buy coverage on ACA exchanges, are due to expire at the end of 2025.

Johnson accused Democrats of trying to protect Schumer’s “backside” by pressing that and other demands.

He said Schumer and other Democratic leaders were concerned that Schumer would become vulnerable to challenges to his position and House seat by Rep. Alexandria Ocasio-Cortez, D-N.Y., a leader of the party’s progressive wing, if they did not hold firm against Republican demands for a “clean” continuing resolution without any provisions for health-care protections.

Johnson said a debate about how to reform the ACA — popularly known as Obamacare — could happen later.

And he accused Democrats of wanting to give undocumented immigrants federal health benefits.

Senate Majority Leader John Thune, R-S.D., in a separate interview with “Squawk Box,” called the question of ACA tax credit extension “a made-up problem by the Democrats,” who are trying to satisfy a voter base that is opposed to President Donald Trump.

“This is Donald Trump,” Thune said. “Nothing more, nothing less.”

Jeffries, in his own interview on “Squawk Box,” said of Republicans, “If the government shuts down, it’s their decision to do it.”

“We are ready and willing and able to find a bipartisan way forward,” Jeffries said.

But he said Democrats are unwilling to support a bill that does not include health-care protections.

“We will not support a partisan Republican spending bill that continues to gut the health care of the American people,” Jeffries said.

He said that on Wednesday, “notices are going to start going out” to tens of millions of Americans about higher insurance premiums that they will pay if the ACA subsidies are not extended.

“We are fighting to deal with the health care of the American people,” Jeffries said.

Asked by CNBC’s Becky Quick, “Is it true you want to restore American taxpayer benefits to illegal immigrants?” Jeffries replied, “Of course not.”

“And thank you for asking that question, because this is also an outright lie,” Jeffries said.

“Federal law prohibits the use of taxpayer dollars to provide medical coverage to undocumented individuals,” he said. “That’s the law, and there is nothing in anything that we have proposed that is trying to change that law.”