(Zero Hedge)—President Trump on Saturday implored ‘All Republicans’ to vote on a 99-page spending bill that would keep the government funded through September, as a March 14 deadline approaches for the latest government shutdown threat.
The bill largely maintains current spending levels, while an additional $8 billion would be included for defense programs, and $6 billion for veterans’ healthcare.
Non-defense spending would drop by approximately $13 billion.
Johnson is setting up the bill for a vote on Tuesday, despite a lack of buy-in from Democrats – essentially daring them to vote against it and risk a shutdown. He’s also betting that Republicans will be able to quash inner divisions over spending and force it through.
Trump Asks GOP To Come Together
“The House and Senate have put together, under the circumstances, a very good funding Bill (“CR”)!” Trump wrote on Truth Social, aking all Republicans to (Please!) vote yes on it next week.
“I am asking you to give us a few months to get us through to September so we can continue to put the Country’s “financial house” in order,” the post continues.
“Democrats will do anything they can to shut down our Government, and we can’t let that happen. We have to remain UNITED — NO DISSENT — Fight for another day when the timing is right. VERY IMPORTANT. MAKE AMERICA GREAT AGAIN.”
As Bloomberg notes, unlike previous shutdowns, this one would impact all discretionary spending since none of the 12 appropriations bills have been signed into law.
While key entitlement programs like Social Security, Medicare, and Medicaid would continue making payments, administrative delays could affect new enrollments. With a razor-thin Republican majority in the House and the need for bipartisan cooperation in the Senate, negotiations remain fraught, as both parties clash over budgetary provisions that could make or break a last-minute deal.
The economic consequences of a prolonged shutdown, according to Bloomberg Intelligence, would be immediate yet largely reversible. A month-long halt in government operations could shave 0.4 percentage points off GDP growth in the first quarter, though a rebound is expected once normal spending resumes. While federal workers may face furloughs, unemployment figures would not be affected in March but could rise by 0.5 percentage points in April if the impasse drags on. Inflation would see a temporary uptick because furloughed federal workers’ output wouldn’t be counted, even though they will eventually be paid.
More:
- Economic Data Collection: The shutdown will delay crucial economic reports like the consumer price index (CPI), unemployment rate, and retail sales data.
- Federal Agencies: Around 850,000 workers could be furloughed.
- Impact on the Fed: The Federal Reserve, which operates independently, will continue normal operations, including the scheduled March 18-19 FOMC meeting.
As Bloomberg concludes:
In normal times, avoiding a shutdown would be a big priority – but now, amid the flurry of dramatic steps early in Trump’s term, it’s just one of many competing priorities. It’s not clear if the two sides can find common ground. Only twice before has the government been shuttered when one party controlled the White House, House of Representatives and Senate – and both were during the first Trump administration. Whether a third such episode can be avoided will depend on how the two sides assess the tactical risks of bringing the normal operations of government to a halt.
Meanwhile, US Sovereign Risk suggests people are getting nervous…
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