Congress Heads Out For Vacation As Government Shutdown Looms

Tyler Durden's picture

Members of Congress have headed back to their districts for a two-week recess after one of the most bitterly divided sessions in history that culminated with Republicans launching the 'nuclear option' to confirm Supreme Court Justice Neil Gorsuch.  Unfortunately, upon their return to Washington DC, they will have just 5 days to unveil, debate and pass a spending bill, or trigger a government shutdown on April 28.

And while government shut downs have happened before with little economic consequence, as Goldman warns, failure to pass a budget this time around could have broader implications regarding the Trump administration's ability to implement some of his key policy initiatives like tax reform and healthcare...issues which have clearly helped boost equity markets to all-time highs.

Congressional appropriations expire April 28. If Congress does not pass an extension, the federal government will partially shut down. The economic consequences of a short shutdown are minor, since lost federal pay is usually made up retroactively and government procurement and private sector activity would be largely unaffected.

 

However, a shutdown would send  another signal to markets that Republicans may not be able to enact their agenda, lowering expectations for tax reform and an infrastructure program.

 

We believe Congress is more likely to meet the deadline, but see a one in three chance of a shutdown.

 

The “freedom caucus” in the House may be unwilling to vote for a spending bill, denying Republicans a majority without Democratic votes. However, Democrats might be unwilling to provide those votes as they often have in the past, in light of the decision to change Senate rules to confirm Neil Gorsuch to the Supreme Court over Democratic opposition.

 

That said, there is not yet a clear issue Democrats are likely to point to in defense of a shutdown, as Republicans did in the 2013 shutdown when they demanded that Obamacare be defunded. If such an issue emerges—Republican leaders have already indicated they plan to keep funding for the border wall out of the bill to avoid such an issue—then the odds of a shutdown would rise considerably.

While the media will undoubtedly go berserk if a Government shut down actually happens, they're hardly unprecedented.  Per the chart below from Goldman, there have been 11 such shutdowns since 1977, varying in duration up to 21 days.

Shutdowns

 

Of course, the likelihood of any spending bill getting passed with bipartisan support will ultimately depend on how aggressive the Trump administration wants to be in demanding funding for the border wall, as both Chuck Schumer and in the Senate and Nancy Pelosi in the House have confirmed that Democrats will oppose any bill that includes funding for that purpose.  Per Bloomberg:

But there are several wild cards that could derail things, the biggest one being Trump. The president wants Congress to begin spending money on a border wall -- his signature campaign promise -- even though Democrats are mostly opposed and Republican leaders are in no hurry.

 

The White House won’t say whether Trump will threaten to veto the spending bill if the border money isn’t included. Trump has asked Congress for $33 billion in extra defense and border wall funding, paired with $18 billion in cuts to domestic programs.

 

Republicans have rejected the domestic cuts, but it’s unclear how the wall funding will be handled.

 

"The only thing that could derail that progress is the White House insisting on their extraneous demands, which would meet bipartisan opposition,” said Matt House, a spokesman for Senate Minority Leader Chuck Schumer. House Minority Leader Nancy Pelosi warned Thursday that including funding for the border wall will almost certainly cause a loss of Democratic support. “I would hope that they wouldn’t try that,” she said, adding, “the American people don’t even support it.”

Meanwhile, Republicans will undoubtedly continue their civil war with the Freedom Caucus potentially looking to oppose any new spending bill that omits funding for some of Trump's top priorities.  House Republicans “have differences of opinion. And they aren’t just political differences, they are policy differences,” said Republican Senator Rob Portman of Ohio. “They’re going to have a tough time coming together without some Democratic votes, and I think that’s the acknowledgment."

Conservatives, however, are expecting to see some of Trump’s priorities reflected in the measure, something that Democrats are unlikely to go along with.

 

“I think that what you will see, you’ll see funding in there for the wall, I think you will see funding in there for better enforcement of sanctuary cities, and I think you will see a plus-up on military,” Meadows predicted. “I think that most people will vote for that, it will go to the Senate, it will get stripped out and then we will have a hard decision to be made in four days.”

 

Other Republicans say it’s time for the GOP to show it can govern.

 

“We’re going to do what it takes to get get the comity back to the Senate,” said Senate Judiciary Chairman Chuck Grassley, an Iowa Republican.

And while we can't be sure how this will all play out, we're almost certain that any outcome will be positive for U.S. equities... and while they remain ignorantly blissful for now, the T-Bill market is anything but...

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AllTimeWhys's picture

It's not like they get anything done while they're there anyway...

spastic_colon's picture

in the mean time we will meet with janet and buy CAT and GS so we can continue to eat......they could give to shits whether anything gets done because we continue to pay them their self appointed raises.

Looney's picture

 

Speaking of Nancy Pelosi…

Her original nipples, after all that skin-pulling and tightening, have migrated all the way around the shoulders and down onto her butt cheeks, forming a fully-functional set of… ass-boobs.

Looney

P.S. Don’t get too excited, though. Paul Ryan called dibs on motorboating THAT “cleavage”.   ;-)

FrozenGoodz's picture

More egg on face coming for Trump admin? Maybe i'll stick around afterall

nmewn's picture

The children! Dear gawd people think of the cheeelrin! Without a Congress in all likelihood cheeelrin are going to die! Plane's will drop out of the sky! Zoo animals will starve and thousands of cat skeletons will be found in tree's because no firemen! Granny and her subsidized hoveround are going to be shoved right over the cliff by the Trump-Hitler-Ryan cabal cuz of an easily affordable battery wasn't provided!

What have we become?!  ;-)

UnpatrioticHoarder's picture

soooooo.... time for a nuclear war, right?

nmewn's picture

The result is the same for the middle class when Congress is in session...isn't it? One giant clusterfuck. 

I would pay them to stay the hell away.

"If you like your doctor you can keep your doctor."

Really? 

JRobby's picture

"Don't worry about this one, if you miss it, we lose"

Hulk's picture

Freeloaders . Nothing like an EXTRA 3 weeks of vacation on the backs of those who

can barely get 2 weeks...

AVmaster's picture

"

Government Shutdown Looms"

 

And how is that a bad thing???

 

>_>

No_More's picture

What is this 'vacation' of which you speak?

Bill of Rights's picture

All you Democrat operatives stick out like a sore thumb...fuck off already..

The Wizard's picture

What Mitch is saying is we won't have a problem raising a non existent debt ceiling.

What a moron, why do you think it called a ceiling, Mitch?

NIRP Diggler's picture

You say that is if it's a bad thing.  The less they "get done" the better off you are.

SilverRoofer's picture

What a bunch of Over Paid ASSHOLES!

BlindMonkey's picture

A gov shutdown seems so delicious right now.  

 

"Thank you Sir!  May I have another!"

 

https://www.youtube.com/watch?v=qdFLPn30dvQ

TeamDepends's picture

Flounder: You guys playing cards?

wherewasi's picture

What, again ?  Bla bla bla..

Osmium's picture

I have an idea.  Lock the fkn doors of the Capital building when these clowns leave and don't let them back in.

Seasmoke's picture

I have an idea. Lock the fkn doors of the Capital building when these clowns are all inside and don't let them back out and burn it to the ground. For all future tyrant wannabes to see.

/Fixed it.

BandGap's picture

Seriously, I think we have to shut it down to see what the fuck is in it, paraphrasing my least favorite member of Congress.

This could be a true evaluation of what we really need if someone wanted to. Only restart the systems that provide for the basic need as given in the Constitution.  Then again, all hell would break loose in hip-hop nation as the EBT cards all go to zero and people have to figure out a way to feed themselves.

Easier to fire the hangers on from previous administration appointments. Make them reinterview for their jobs, happens all the time in the world I work in.

No_More's picture

Don't forget the office buildings adjacent to the Capitol, there are a couple of those too

silverer's picture

Please don't come back.

GlassHouse101's picture

Debt for sale! Debt for sale! Anyone want to buy some debt? Debt for sale!

Jack Offelday's picture

Most hard working Americans won't even notice a government shut down.  Seriously.

Seasmoke's picture

Doesn't matter. Just keep buying stocks !!!!!

Chippewa Partners's picture

They are headed out for meetings with their Goldman brokers trying to decide which companies will benefit the most, long or short, on the health care train wreck coming.

Insider trading laws are something they know zero about.      

 

bankbob's picture

And, they are exempted from Insider trading laws.  

Grumbleduke's picture

They're heading for the bunkers!

UnpatrioticHoarder's picture

Right, that is why they always head to the "golf course" in a time of crisis.....

https://www.youtube.com/watch?v=C2hWRSLc_go

No_More's picture

They're exempt from TSA screening ya know. Their staffs too when they're travelling with the bosses.

Theta_Burn's picture

Nothing a few more cruise missles launched on some patsy won't squash..

Little ill-jong better watch the fuck out as it appears Trump has a case of swamp-ass...

 

youarelost's picture

There will never be a shutdown

bankbob's picture

RECESS APPOINTMENT TIME!

Eisenhower put 3 justices on the SCOTUS with recess appointments. Trump should be able to get all his 2nd tier people in.

DEMIZEN's picture

let me cite the rabid dog again: what difference does it make at this point?

JailBank's picture

It is high time for me to put an end to your sitting in this place, which you have dishonored by your contempt of all virtue, and defiled by your practice of every vice.

 

Cromwell.

Sid Davis's picture

Nero fiddles as Rome burns.

The Carbonator's picture

The government shuts down every weekend.  We have all survived so far.

 

Get over it.

Atomizer's picture

We managed to operate during the last government shutdown. Keep it down for 6 months this time around. It will the financial barometer on how important these jobs really are. 

NoWayJose's picture

Wasn't the last time the Senate passed a budget sometime back in the 1800's? We will get another CR!

jamesmmu's picture

They only have 5 days left when they come back from vacation to get a debt deal. This is aburd. 

GunnyG's picture

When they all file back in, lock the doors and start the tribunals. The enemy of America IS the Congress.

LawsofPhysics's picture

Modern banking and finance OWNS them, but yes, take their motherfucking heads and let's get some honest folks in there. It will come to this if things continue as they are anyway.

dirty belly's picture

3. Visualize members of the physical dark Cabal, such as central banking criminals Rothschilds and Rockefellers, and other members of this Cabal such as Henry Kissinger, George Bush, the Jesuits etc. peacefully surrendering and stepping down from their positions of power, releasing control over the financial system and the mass media.

Visualize civil authority arresting those members of the Cabal that do not wish to surrender.

agstacks's picture

Obama closed war memorials first, what will Trump close first? 

Peterman333's picture

Love how they threaten.. "the government will shut down."

GOOD! Close the nat parks too, they aren't going anywhere, they'll be there.