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'There's no path': Government shutdown creeps closer as last-ditch GOP effort collapses

House Speaker Kevin McCarthy suffered another defeat Friday afternoon when a last-ditch effort to fund the government collapsed in a notable rebuke from his own party.

The GOP-only proposal to avert a government shutdown failed with 21 Republican lawmakers joining all Democrats to defeat the proposal. The final vote was 232-198.

The most recent loss for the speaker is likely to only be the latest confirmation that shutdown on Saturday night is all but inevitable at this point.

"There's no path to law" right now for the various last-ditch efforts — both in the House and Senate — said former Congressional Budget Office Director Doug Holtz-Eakin during a Yahoo Finance live appearance on Thursday.

He forecasts the chances of a shutdown at 100%.

Read more: How a government shutdown would impact your money: Student loans, Social Security, investments, and more

Those Senate efforts, meanwhile, continue to grind along slowly with similarly little chance of averting a shutdown that would throw hundreds of thousands of government employees temporarily out of work and create economic headwinds that could grow with each passing day.

The Senate proposal has widespread bipartisan support — and would likely pass both chambers overwhelmingly — but it currently remains bottled up in the Senate due to procedural delays, with Senate Majority Leader Chuck Schumer hoping for votes to break the logjam over the weekend.

It remains unclear if that measure — endorsed by both Schumer and Senate Minority Leader Mitch McConnell — will receive a final vote before the Saturday deadline. But even if it passes in time, McCarthy has pledged to ignore it in the House.

McCarthy for his part remained defiant even after his latest loss, reportedly telling reporters after Friday's vote, "It’s not the end yet. I have other ideas."

A path to compromise — but first, 'this could go on for months'

In spire of McCarthy's defiance, the Senate’s plan is seen as the likely vehicle for any compromise. But the catch is that many observers say that what may be needed to break the logjam is a shutdown that increases the political pressure for action.

"I can't envision a final deal without Democrats," AGF Investments chief US policy strategist Greg Valliere told Yahoo Finance on Friday of the House Republicans' go-it-alone approach.

"It's just a matter of time before McCarthy and other Republicans have to throw in the towel and agree that without Democrats this could go on for months," he added.

McCarthy was also defiant Friday morning during a tense exchange with reporters.

"You don’t have to be so negative," he chastised assembled journalists under tough questioning about how any deal will eventually be enacted. McCarthy also pledged multiple votes if needed, saying "I don't stop." McCarthy's plan is focused on border security measures with little to no support among Senate Democrats or President Biden.

WASHINGTON, DC - SEPTEMBER 29: U.S. Speaker of the House Kevin McCarthy (R-CA) listens during a press conference on funding for the southern border at the U.S. Capitol Building on September 29, 2023 in Washington, DC. House Republicans have expressed their wish for funding for the border to be at the forefront of legislation to fund the government ahead of the government shutdown. (Photo by Anna Moneymaker/Getty Images)
Speaker of the House Kevin McCarthy (R-Calif.) listens during a press conference on a possible government on Sept. 29 in Washington. (Anna Moneymaker/Getty Images) (Anna Moneymaker via Getty Images)

The Senate’s 79-page bill, by contrast, would keep the government open until Nov. 17 and provide about $6 billion for the war effort in Ukraine and another $6 billion for disaster relief efforts in places like Maui and Florida.

Senators are currently considering adding some border provisions in fluid talks that continued Friday.

Biden and his aides have largely stayed out of the fray but have repeatedly warned about the effects of a shutdown.

Treasury Secretary Janet Yellen added her voice Friday during a speech in Savannah, Ga., saying that a shutdown "would hurt American families and cause economic headwinds that could undermine the progress we’re making."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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