Disaster money may force government shutdown

Debris from a building lies scattered about the property of a heavily damaged supermarket after Hurricane Irene sent the Delaware River surging in N.Y.

Jeremy Hobson: Today lawmakers will be voting on a bill to fund the government after the current fiscal year ends on October 1st. And it turns out that Washington's polarized politics could again lead us to the brink of a government shutdown.

Our Washington bureau chief John Dimsdale is here live to explain what is going on. Good morning, John.

John Dimsdale: Good morning, Jeremy.

Hobson: So what is the issue that might bring about a shutdown this time?

Dimsdale: This is an impasse over Federal disaster relief. As you know, we've had a lot of disasters recently, from hurricanes to tornadoes. So the Senate, where Democrats are in control, has approved $7 billion to replenish the depleted Federal Emergency Management Agency's disaster relief fund. But the Republican majority in the House wants only about half that amount.

Hobson: But both sides have come out and said that they want to fund FEMA, right? So what's the problem?

Dimsdale: Democrats say that the Republican insistence on paying for disaster relief by cutting spending from a electric vehicle support program will hurt the economy. Here's Democratic minority whip Steny Hoyer.

Steny Hoyer: You and I both agree it oughta be paid for, the question is do we pay for it, do we pay for it right now? If you target this particular fund, you are targeting a fund which has demonstrably grown jobs.

But Republican majority leader Eric Cantor argues there's an even more pressing principle at stake.

Eric Cantor: What we're trying to do is finally face facts. We in this body, in this town, must stop the Federal government from continuing to spend money it doesn't have.

Hobson: Well, it seems like John, we've heard these arguments before, and things usually end up working out in the end when they reach this kind of impasse. Do you think a government shutdown could happen this time?

Dimsdale: You've got to figure there's a way that Congress can compromise on this. It really just comes down to money. If anything, they have to salvage their poor approval ratings with the American people. But this is only the first of many financial quagmires that could force a government shutdown before next fall's elections.

Hobson: Something to look forward to. Marketplace's John Dimsdale in Washington, thanks John.

Dimsdale: Thank you.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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