WASHINGTON (LA Times) — Neither side in the standoff over the federal budget showed signs of movement Sunday as the shutdown of government agencies moved toward its second week, although both hinted at some aspects of what a potential deal eventually could look like.
Republicans and Democrats have deadlocked over two related issues — funds to keep government agencies running and the need by Oct. 17 to raise the limit on the government’s ability to borrow money.
The shutdown of government agencies, which began Oct. 1, has so far had limited impact on the economy, but economists have warned that the damage will mount as the closures drag on. This week, the shutdown is expected to begin hitting mortgage markets, for example. Real estate industry officials have said that home buyers could start seeing delays or loan cancellations because the IRS and other government agencies cannot respond to requests for documentation and other paperwork needed to close on loans.
Whatever the impact, however, the shutdown seems unlikely to end for at least several more days — and quite likely another week — as Congress and the White House try to resolve the separate standoff over the government’s borrowing limit. That deadline has far more severe consequences. If Congress does not vote to increase the debt ceiling, the government could quickly be unable to pay its debts. Most economists and business leaders say such a default could trigger another financial crisis.
Read more at LATimes.com.