Analysts at Rabobank point out that today in the US, Congressional leaders will meet with President Trump to discuss the federal government shutdown.
Key Quotes
“Yesterday, the new US Congress convened and Nancy Pelosi was elected as the new House Speaker. The new Democratic majority in the House of Representatives adopted spending bills that will fund most of the now shutdown part of the federal government through September. In addition, they adopted a bill funding Homeland Security through February 8, which would allow more time to negotiate a deal with President Trump on border security. This bill provides $1.3bn for border fencing and $300mn for border security items such as technology and cameras. However, it does not meet President Trump’s demand for $5bn for a border wall.”
“The House package closely resembles the Republican bill that was adopted by the Senate prior to the shutdown. This will allow the Democrats to put the blame on the Republicans, who are hesitant about supporting a bill that President Trump will veto. Therefore, the Democratic package may not come to a vote in the Senate, where the Republicans expanded their majority. While none of the three parties is likely to blink in the near term, it does seem to us that in the end a compromise should be feasible in terms of the amount made available for border security, and the way it is spend so that Trump can claim that it is a wall and Democrats that it is not. After all, the left and the right are living in alternative realities anyway. For more details about the economic impact of the government shutdown that started on December 22.”
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