Some Democrats support US Senate legislation to end government shutdown
The US Senate has made a significant move towards re-opening the government, as a coalition of moderate Democrats diverged from their party leaders and cast their votes in favor of a deal aimed at concluding the unprecedented shutdown. The Senate cast a 60-40 vote on a procedural measure to move the bill forward on Sunday evening. The Senate has adjourned until Monday and has not yet set a date for the final vote on passage. The House must also give its approval to the measure before it can be sent to President Donald Trump for his signature. According to the agreement, Congress is set to approve full-year funding for the departments of Agriculture, Veterans Affairs, and Congress itself, while allocating funds for other agencies until Jan. 30. The legislation aims to ensure compensation for furloughed government employees, reinstate federal payments that were previously withheld from states and localities, and bring back agency personnel who were laid off amid the shutdown.
The timeline for the conclusion of the shutdown remains uncertain. The Senate requires unanimous consent from all members to swiftly conclude the shutdown. A single senator has the power to impose days of procedural delays. “It looks like we’re getting closer to the shutdown ending,” Trump told reporters Sunday evening as he returned to the White House. Contracts for the S&P 500 rose 0.7 percent, while those for the Nasdaq 100 index advanced 1.1 percent, as the prospects for the deal enhanced appetite for risk. Asian shares experienced an uptick, while bonds declined across the curve, with the yield on 10-year Treasuries increasing by three basis points to 4.13 percent. The yen, known for its status as a safe haven currency, experienced a decline of 0.3 per cent against the dollar. Democratic Senator Tim Kaine, representing Virginia, a state with a significant population of federal workers, expressed his support for the deal, highlighting the bill’s prohibition on new federal layoffs until January 30. The passage in the House is not assured. Democratic leaders have expressed their opposition to any agreement that fails to extend the expiring Obamacare subsidies, which this bill does not address. Members of the Conservative Republican faction are advocating for a bill that would provide funding for the entire government until September 30 of next year. The face-saving accord also significantly fails to meet the objectives set forth by House and Senate Democratic leaders, who had insisted on an extension of expiring Obamacare premium subsidies and the repeal of Medicaid cuts enacted by Republicans earlier this year.
According to a source, Democrats have obtained a commitment from Republicans to vote on a bill aimed at renewing the Affordable Care Act tax credits by mid-December. The commitment, initially presented by Senate Majority Leader John Thune several weeks prior, did not meet the approval of all Democrats. “We will fight the GOP bill in the House of Representatives,” House Democratic leader Hakeem Jeffries stated on Sunday night. The impending conclusion of the 40-day shutdown reflects previous confrontations in which the party seeking to exploit a government closure for policy gains ultimately finds itself without success. Trump was unable to obtain funding for the border wall during the 2018-2019 shutdown, while Republicans did not succeed in repealing Obamacare during the 2013 closure. This year, Democrats cast their votes 14 times to obstruct a no-strings stopgap measure that the House passed on September 19, which aimed to keep departments and agencies operational until November 21. On Wednesday, the shutdown reached a historic milestone, surpassing the 35-day closure experienced in 2018 and 2019 during the first Trump administration. Senate Democratic leader Chuck Schumer expressed his opposition to the deal. On Friday, Schumer stated that Democrats would permit the government to reopen in return for a one-year extension of the expiring Obamacare tax credits. The Republicans promptly dismissed that offer, with many insisting on a complete overhaul of Obamacare in favor of a GOP alternative that has yet to be revealed. Republicans have chosen to obstruct Democrats regarding their requests for $1.5 trillion in new spending by maintaining the House’s recess since September 19.
The White House intensified its stance by dismissing a significant number of government employees, warning against compensation for over 600,000 furloughed federal workers, and attempting to circumvent court mandates regarding food stamp benefits. As the bustling Thanksgiving travel season approached, Transportation Secretary Sean Duffy mandated airlines to cancel flights, resulting in significant challenges for travelers. On Sunday, he remarked that it would only deteriorate during the holiday season. The strategies effectively succeeded in persuading a sufficient number of Senate Democrats to yield to pressure. Republicans, while holding the majority in both houses of Congress, required the support of eight Democrats to advance a stopgap spending bill and halt debate in the Senate. Discussions among a coalition of bipartisan senators intensified following the Democratic victories in the off-year elections across New York City, New Jersey, Virginia, California, and other locations. Republicans stated that Democrats seemed worried that retracting their shutdown demands prior to the elections could negatively impact voter turnout. It remains uncertain if Congress will reach an agreement to extend the Obamacare subsidies prior to their expiration at the end of December. House Republican leaders express their opposition to the extension, proposing instead a range of conservative priorities. These include the expansion of short-term health insurance plans to compete with Obamacare exchange plans and the implementation of abortion-related restrictions. Senate Republicans have stated that any extension must incorporate significant modifications, including income limits on subsidy recipients and a stipulation that beneficiaries contribute a portion of the premium. Some, however, are insisting on a complete overhaul of the Affordable Care Act before consenting to any agreements.
The repercussions of the shutdown are imposing a financial burden of approximately $15 billion per week on the US economy. The Congressional Budget Office estimates that the shutdown will lead to a reduction in the annualized quarterly growth rate of real GDP by 1.5 percentage points by mid-November. On Friday, consumer sentiment reached a three-year low, reflecting increased anxiety surrounding the shutdown, prices, and the job market. The suspension of most government economic data has resulted in the Federal Reserve operating without crucial insights as it confronts persistently high inflation and increasing unemployment. The comprehensive annual spending bills feature notable victories for Democrats, such as the dismissal of proposed cuts to international food aid advocated by the Trump administration and an augmentation of funding for Capitol Police security to safeguard lawmakers. The legislation would provide a significant advantage to the beer industry by limiting the sale of intoxicating hemp products. The hemp industry asserts that the provision jeopardizes 325,000 jobs.
