Is A Partial Government Shutdown On The Cards This Weekend?

• The vote failed 52 to 47, short of the 60 votes needed to pass the bill. 
• Without funding, the DHS will go into a shutdown on Saturday.
• According to a report from Reuters, a prolonged delay of the funding bill and subsequent partial shutdown would impact workers such as the Transportation Security Administration employees at airports.

The U.S. Senate failed to advance a funding bill for the Department of Homeland Security after Democrats voted to block the deal on immigration enforcement.

Democratic lawmakers on Thursday insisted on sweeping changes to immigration enforcement, blocking a Republican-backed measure to secure votes to fund the DHS beyond the Feb. 13 midnight deadline. The vote failed 52 to 47, short of the 60 votes needed to pass the bill.

Without funding, the DHS will go into a shutdown on Saturday.

Shutdown Impact

While the impact of the shutdown is expected to be minimal, since the DHS has classified about 258,000 of its 272,000 employees as essential workers last year and kept them working through the record 43-day shutdown, workers are likely to be required to continue without pay.

While the Immigration and Customs Enforcement (ICE) and Customs and Border Protection are unlikely to be impacted because of the budget increases last year, other departments are likely to feel the burden.

According to a report from Reuters, a prolonged delay of the funding bill and subsequent partial shutdown would impact workers such as the Transportation Security Administration employees at airports.

The Federal Emergency Management Agency (FEMA), which supports disaster management across the country, is also likely to be impacted by worker furloughs.

Moreover, the Senate is also breaking for about 10 days on Saturday, although it must return if an agreement is reached.

Senate Republican leader John Thune said that the offer sent to Democrats was a “good-faith counteroffer” and hoped it would be passed to allow more time for negotiation.

“It is an extremely serious offer,” Thune reportedly said. “It increasingly looks like Democrats are not.”

Market Reactions

Meanwhile, U.S. equities declined on Thursday. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.96%, the Invesco QQQ Trust ETF (QQQ) fell 1.53%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.67%.

Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 20+ Year Treasury Bond ETF (TLT) was up by 1.29% at the time of writing, while the iShares 7-10 Year Treasury Bond ETF (IEF) rose 0.53%.

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