trending Market Intelligence /marketintelligence/en/news-insights/trending/wxgnhtjea1vroy-sbktlqq2 content esgSubNav
In This List

Trump, Congress expected to avoid government shutdown


Banking Essentials Newsletter: 17th April Edition


Japan M&A By the Numbers: Q4 2023


Banking Essentials Newsletter: 7th February Edition


Insurance Underwriting Transformed How Insurers Can Harness Probability of Default Models for Smarter Credit Decisions

Trump, Congress expected to avoid government shutdown

While U.S. President Donald Trump has alternated threats to shut down the government if spending packages do not contain adequate funds for border security with suggestions that a closure would only occur after midterm elections, political realities are likely to push the president to sign whatever bill Congress sends him, analysts said.

"Watch what President Trump does more than what he says," said Brian Riedl, a senior fellow at the conservative-leaning Manhattan Institute. "What he does is typically sign the Republican-passed appropriations bills that come to his desk."

Congress passed several stopgap spending measures at the beginning of the fiscal year, and Trump had previously threatened to veto the most recent bill, which funds the government through Sept. 30.

The structure of the current funding legislation, comprising several bills known as minibuses, rather than one large government funding package called an omnibus, diminishes the likelihood of a shutdown, according to Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, a nonpartisan think tank in Washington.

"What they might do is pass some of the appropriations bills in full, and then whatever they aren't able to complete, essentially give themselves an extension by passing a continuing resolution on those last few bills," Goldwein said.

Congress can pass continuing resolutions to fund the government for a limited period while it works on more-permanent funding legislation, since those bills can be passed for some agencies without affecting the entire government.

If border security funding is likely to sink any single funding bill, it would most likely only affect homeland security appropriations, Goldwein added.

"The fact that they're not doing this as an omnibus, they're not doing all the bills together, means that it's possible the border wall blows up the negotiations over the homeland security appropriations bill, but doesn't blow up the negotiations over funding most of government," he said.

'Terrible politics'

Despite the president's apparent interest in a shutdown, congressional Republicans have cautioned Trump that such a move would be politically dangerous for party members up for re-election later this fall. Democrats are already expected to make major gains in the House of Representatives and could gain control of the chamber.

"In any meeting with Republican congressional leaders, I think they will implore the president to understand the terrible politics of a shutdown," Riedl said, adding that Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan would communicate to the president that "a government shutdown will guarantee a loss of the House and put the Senate in jeopardy."

"Past indications suggest that sort of argument will carry the day with the president," Riedl said.

Lawmakers need to be able to prove they should keep their jobs, hence the necessity of averting a shutdown, Goldwein said.

"The big thing is, they probably want to show that they can govern," he said, calling that an "unfair solution" because it is easy to give the appearance of competence when the issue is spending. "You don't need to fight over money if you have all the money in the world."

In February, the government shut down for several hours after Sen. Rand Paul, R-Ky., used Senate rules to hold up a vote on a funding bill until after a stopgap spending measure expired. The bill passed only after Paul had exhausted all the procedural tools at his disposal.

That shutdown came weeks after a three-day closure caused by disputes over immigration legislation.