Federal Deficit, Government Shutdown | featured news

The House of Representatives on Tuesday passed a bill that puts the government on stable financial footing for six weeks but does nothing to resolve a battle over spending that is likely to flare again.

The legislation will finance the government for the first four days of October, until lawmakers return and can vote on a more ambitious seven-week spending bill.

A last-minute deal reached by Democratic and Republican leaders in the Senate diminished the chances of a government shutdown by week's end.

Financial institutions across the country have begun preparing for a worst-case scenario if Congress fails to raise the nation’s borrowing limit, assembling plans to offer customers emergency loans or waive fees if their federal pay or benefits checks do not arrive on time. Navy Federal Credit Union, the largest in the country, said this week it would advance pay to direct-deposit members who are active-duty military or civilian employees of the Defense Department. It also said it would expedite approvals for lines of credit, overdraft programs and higher credit card limits.

Rival Democratic and Republican plans to raise the government's borrowing ability have thrust Congress into a standoff just one week away from a potentially devastating debt crisis.

House of Representatives Speaker John Boehner broke off talks with President Barack Obama on Friday and said he will begin negotiations with Senate leaders aimed at meeting an August 2 deadline to avert an unprecedented U.S. debt default.

The government will lose about $200 million a week in airline ticket taxes if the Federal Aviation Administration is forced to shut down.

Top Republican lawmakers and the Obama administration’s budget director both predicted Sunday that an agreement would be reached before the federal government defaults on its debt in early August, but both sides continued to squabble over the details of competing proposals, offering little evidence that a deal was at hand.

Congress approved a $38-billion spending cut package Thursday, sealing a deal to prevent a government shutdown before plunging into an even more far-reaching debate over spending on federal programs and benefits for the years to come.