ST. PETERSBURG, Fla. — UPDATE: Congress was able to avoid a government shut down after passing a stopgap spending bill.
The original story follows:
Major economic deadlines are nearing amid record-level inflation and supply chain disruption from the pandemic.
"And then you have the omicron variant that comes into play," 10 Tampa Bay Political Analyst Dr. Lars Hafner said.
The emergence of the variant sent the Dow Jones plummeting the day the World Health Organization labeled it a variant of concern. Travel restrictions soon followed.
"It was really quite dramatic how omicron turned nothing at all into something," Dr. Victor Claar, Florida Gulf Coast University economist, said.
On top of all that, a U.S. government shutdown is looming if Congress is unable to strike a stopgap funding bill by the end of Friday. Meanwhile, if the debt ceiling goes into default by the Dec. 15 deadline, the country could go further into debt.
"You would start to see a pinch in the economy," Hafner said. "If we don't get our bank in order as a federal government, if we don't continue to fund things as a federal government, that means other countries can come in and pull back their debt."
According to Claar, the threat of omicron could make the financial problems worse if researchers find the variant is easier to transmit or if vaccines are unable to provide the same level of defense.
Economic growth would slow further through examples like restricted travel and encouragement to stay home. Not to mention, inflation could worsen.
Claar said the threat toward China would further disrupt financial recovery since their policies are more strict toward COVID-19.
But Claar added there are also reasons to stay positive amid the challenges.
"We've learned a lot and we're vaccinated now," Claar said.
Claar said governments may be less likely to impose lockdowns, thus hurting the economy, due to having some capacity of immunity.
In addition, more people are better equipped to work from home and retailers of all kinds have adapted new skills to address consumer needs stemming from the pandemic.
"You can get a carryout Margarita in Florida and it's totally legal," Claar said. "Even online shopping outlets like Sam's Club, Walmart, or Target. They've increased the different variety of goods that they've made available."
Claar said the world is better prepared to tackle the financial setbacks the omicron variant could cause.
Back in Congress, Claar and Hafner said lawmakers are likely to come up with an agreement on the debt ceiling and avoid straining the economy even further.
"It's a really messy process but it gets done to some capacity but there may be a time where it doesn't get done," Hafner said.
"If Congress lets us down on this one, neither side is going to win and I think that ultimately is what will prevail."