After 43 days, the longest government shutdown ended when the Congress approved legislation funding the government until Jan. 30. The Continuing Resolution (CR) was amended by the Senate and therefore needed to be approved by the House before going to the White House for the President’s signature.
What changes did the Senate make?
Probably most importantly, the Senate passed CR only runs until Jan. 30, which means that the nation could face another shutdown crisis at the end of January. The CR funds government agencies at the same continuing level as approved by Congress for the previous fiscal year. CRs are needed at the end of the fiscal year, Sept. 30, if Congress has not approved new budgets. As part of the shutdown-ending CR, the Senate did fund three areas of government for the current fiscal year: the Department of Agriculture, which handles SNAP funding; the Department of Veterans Affairs; and military construction, which funds projects across the country. However, critical areas, from Health and Human Services (HHS) to Defense, will need to be approved prior to the new deadline or the nation faces another shutdown. Another shutdown could be avoided by another CR, maybe running for the entire fiscal year, if Congress and the president can agree.
The Congress didn’t address the issue of Obamacare/Affordable Care Act (ACA) subsidies that are scheduled to expire at the end of the year. Democrats could again draw a line in the sand and force another shutdown unless those senators and representatives who broke with the party leadership to end the shutdown continue to vote with Republicans to keep the government open.
The bottom line is that this remains a busy time in DC, as government funding and ACA subsidies take center stage for the holiday season and first weeks of the new year.
Fed minutes
On Wednesday at 2 p.m., the Federal Reserve will release the minutes from the October meeting of the Federal Open Markets Committee (FOMC), during which the central bank voted to reduce rates by 25 bps. There will be great interest in the minutes, as Fed Chair Jerome Powell created some uncertainty about possible central bank actions during his press conference after the October meeting.
At the presser, Chair Powell conveyed caution in noting that further rate cuts weren’t guaranteed, citing the government shutdown’s interruption of economic reports and sharp divisions among the 19 Fed officials who participate in the central bank’s interest-rate deliberations.
Powell said there were “strongly differing views about how to proceed in December” at the next FOMC meeting. He explicitly noted that a further reduction in the benchmark rate is “not a foregone conclusion — far from it.”
Chair Powell’s calculated remarks, raising uncertainty about the December action, places great interest in the October meeting minutes to see how sharply and widely the views diverged, with regard to both the October cut and the outlook for December.
