After 40 days of political deadlock, a breakthrough has finally emerged.
Written by: Xiao Yanyan
Source: Jinshi Data
The U.S. Senate has taken a key step in the process of restarting the government: several moderate Democrats broke through the party leadership's blockade and voted to support an agreement to end the record-long government shutdown.
On Sunday evening local time, the Senate passed a procedural motion to advance the bill with a vote of 60 to 40, but the final vote timing has yet to be determined. The bill must also be approved by the House of Representatives before it can be sent to Trump for signing into law.
According to the framework of the agreement, Congress will provide a full-year budget for the Department of Agriculture, the Department of Veterans Affairs, and Congress itself, while funding for other government departments will be maintained until January 30 of next year. The bill will retroactively pay the salaries of government employees who were forced to take leave, restore federal funding to state and local governments, and recall federal employees who were laid off during the shutdown.
When the government shutdown will end remains uncertain. The Senate needs the consent of all members to expedite the process, and any single member could delay proceedings for several days.
House Speaker Mike Johnson has indicated that he will notify members two days in advance to return for a vote. Trump stated to reporters upon returning to the White House on Sunday evening, "The end of the shutdown seems to be getting closer."
Encouraged by the easing of the shutdown crisis, S&P 500 futures rose 0.7% in Asia, and Nasdaq 100 futures climbed 1.1%. Asian stock markets rose in tandem, and U.S. Treasury yields increased across the board, with the 10-year Treasury yield rising 3 basis points to 4.13%. The traditional safe-haven currency, the yen, fell 0.3% against the dollar.
Virginia Democratic Senator Tim Kaine expressed support for the agreement on Sunday, as the state is home to a large number of federal employees. He specifically emphasized that the bill prohibits new federal layoffs from being implemented before January 30 of next year.
House approval is not a foregone conclusion. Democratic leaders have publicly opposed any agreement that does not extend subsidies for the Affordable Care Act—this version does not include that provision. Conservative Republicans are demanding a bill that funds the entire government until September 30 of next year.
This face-saving agreement also falls short of the established goals of the Democratic leaders in both chambers of Congress. They had previously insisted on extending the soon-to-expire ObamaCare premium subsidies and repealing the Medicaid cuts plan passed by Republicans earlier this year.
According to informed sources, Democrats are seeking a commitment from Republicans to vote on a bill to extend the Affordable Care Act tax credits by mid-December. However, the commitment made by Senate Majority Leader John Thune weeks ago has not satisfied all Democrats.
"We will block the Republican bill in the House," House Democratic Leader Hakeem Jeffries stated on Sunday evening.
The prolonged shutdown is nearing resolution, mirroring previous bipartisan standoffs: parties attempting to leverage the government shutdown for policy victories have ultimately failed. Trump did not secure funding for the border wall during the 2018-2019 shutdown, and Republicans did not succeed in repealing ObamaCare during the 2013 shutdown.
This year, Democrats have rejected the House's unconditional temporary spending bill passed on September 19, which could have kept departments operating until November 21, 14 times.
Senate Democratic Leader Chuck Schumer stated on Sunday evening that he would oppose the agreement. He had indicated that Democrats were willing to exchange government reopening for a one-year extension of the ObamaCare tax credits. This proposal was quickly rejected by Republicans, many of whom demanded a complete replacement of ObamaCare with an unpublished Republican plan.
Since September 19, Republicans have obstructed the Democratic proposal for a new $1.5 trillion spending plan by postponing House meetings. The White House has continued to apply pressure through mass layoffs of government employees, threatening to withhold salaries for 600,000 furloughed federal workers, and resisting court orders to pay food stamp benefits.
As the Thanksgiving travel peak approaches, Transportation Secretary Sean Duffy ordered airlines to cancel flights, severely disrupting passenger travel. He warned that conditions could worsen during the holiday period.
The Republican pressure strategy has significantly prompted Senate Democrats to compromise. Despite controlling both chambers of Congress, Republicans still need to secure the support of eight Democrats for the temporary spending bill to end the Senate debate.
Following the Democratic sweep of seats in the midterm elections in New York City, New Jersey, Virginia, California, and other areas, negotiations between the two parties' senators have noticeably accelerated. Republicans pointed out that Democrats seem concerned that abandoning shutdown-related demands before voters cast their ballots could affect turnout.
It remains unclear whether Congress can reach an extension agreement before the ObamaCare subsidies expire at the end of December. House Republican leaders have clearly opposed an extension, instead proposing a series of conservative priorities, including expanding short-term health insurance plans to compete with ObamaCare exchanges and implementing restrictions related to abortion.
Senate Republicans emphasized that any extension plan must include significant reforms, such as setting income limits for subsidy recipients and requiring beneficiaries to cover at least part of the premiums. Some members insist that they will only support any proposal after a comprehensive revision of the Affordable Care Act.
The shutdown crisis is costing the U.S. economy approximately $15 billion per week. The Congressional Budget Office estimates that by mid-November, the shutdown will reduce the annualized quarterly growth rate of real GDP by 1.5 percentage points. Amid the deep anxiety caused by the shutdown, rising prices, and the job market, the consumer confidence index has fallen to a three-year low.
The release of most government economic data has been forced to halt, leaving the Federal Reserve in a "blind flight" decision-making dilemma as it grapples with persistently high inflation and rising unemployment.
The full-year spending bill has secured some achievements for Democrats, including vetoing the Trump administration's proposed cuts to international food aid and increasing the security budget for congressional police protecting lawmakers.
If the bill passes, it will significantly advantage the beer industry by restricting the sale of intoxicating cannabis products. The cannabis industry claims that this regulation will jeopardize 325,000 jobs.
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