Government Shutdown Looms as Senate Fails to Pass Funding Bill

TradingKey - The U.S. government edged closer to a shutdown late Tuesday after the Senate failed to pass a bill aimed at extending funding beyond the midnight deadline.

The Senate voted 55 to 45 in favor of the bill, but that fell short of the 60 votes needed to advance the legislation. The outcome all but guarantees that, starting Wednesday, federal agencies will cease all operations except for “essential” activities such as law enforcement. The impact is expected to be broad, potentially disrupting everything from normal air travel operations to the release of key economic data, including the monthly employment report.

President Donald Trump further heightened tensions by threatening to expand his ongoing purge of federal workers. Ahead of Tuesday’s vote, he stated that if a government shutdown occurs, he would cancel programs favored by Democrats and fire even more federal employees.

With no signs of reconciliation between Republicans and Democrats, the likelihood of a last-minute resolution appears minimal. Any potential agreement would still require approval from the Republican-controlled House of Representatives, which is currently in recess — adding further uncertainty to the situation.

However, Senate Republican Leader John Thune said the Senate would hold another vote on Wednesday on the same bill previously passed by the House, offering a faint glimmer of hope for breaking the impasse.

As the shutdown looms, federal agencies have released detailed contingency plans, set to shutter offices engaged in scientific research, customer service, and other “non-essential” functions, and furlough tens of thousands of workers without pay. Military personnel, border patrol agents, and others performing “essential” duties will continue working but will not receive pay until Congress resolves the standoff.

The last U.S. government shutdown occurred during Trump’s first term, from 2018 to 2019, and lasted 35 days over an immigration dispute. According to the Congressional Budget Office, it cost the U.S. economy $3 billion, or 0.02% of gross domestic product.

Read more:

"In "Firefighting" Move, Trump Races to Avert Shutdown with Last-Ditch Congressional Talks"

"What Happens When the U.S. Government Shuts Down? Why This Time Under Trump 2.0 Could Be Worse"