Dark warnings of a government shutdown

  • 27 March 2017
  • NormanL
Dark warnings of a government shutdown

The failure of Republicans to pass a health insurance bill has further spooked some in DC over a possible federal government shutdown at the end of April:

A top Republican with close ties to the White House tells me that after the GOP failure on healthcare, a government shutdown — looming when a continuing resolution runs out April 28 — is "more likely than not... Wall Street is not expecting a shutdown and the markets are unprepared."

And Chris Krueger of Cowen Washington Research Group today will warn financial clients: "Hello April 29 government shutdown."

That's Day 100 of the Trump presidency, by the way.

A senior GOP aide disputed the bearish forecasts: "The White House and Republicans on the Hill cannot/won't risk a shutdown. Given the last week — it's out of the question."

Few things are "out of the question" in DC. What has brought us to the end of April deadline for raising the debt limit?

The federal government, including the Defense Department, has been funded under a continuing budget resolution but that runs out by the end of April, according to Military Times. The current fiscal year’s budget won’t run down until Sept. 30, but a $578 billion military spending bill for 2017 that passed in the House had yet to make it through the Senate.

The big problem this time is Democratic opposition to items the President has proposed in his budget -- including building a border wall, ending funding for Planned Parenthood, and a host of other items.

We are roughly a month out before a shutdown might happen. That ought to be plenty of time for all sides to make their pubic displays, have their remarks noted in the record, and then get on with the decision to raise or not to raise the limit.

We will be keeping a close eye on it all -- particularly what the White House does on the issue. The Treasury Secretary has already called for a debt limit increase. The end game could be rough .