(UBS)
The Senate once again had failed votes on the House-passed bill that would extend government funding through November 21. The Senate also voted this week on legislation to pay federal employees who have worked without pay during the shutdown. Most Democrats opposed the measure, arguing that the bill would give the Trump administration too much authority over who to pay (and not pay). Senate Democrats countered with legislation that would pay federal employees but bar further layoffs by the Trump administration. Senate Republicans will try to put pressure on Democrats next week with votes on a bill to pay air traffic controllers. While the Senate holds these competing political messaging votes, the House has been out of session. The House will be under more pressure to come back to Washington as we get closer to November 21, its proposed extension of government funding.
Key Dates. With no meaningful negotiations to reopen the government, there will need to be some catalyst that pushes the two sides to work out an agreement. The following upcoming dates could be pressure points. Today, October 24, will be the first paycheck that the majority of federal employees will miss. The next military paycheck is scheduled for October 31. It remains unclear whether the administration will be able to find funds to pay service members the way they did earlier this month. Open enrollment for the Affordable Care Act (Obamacare) begins on November 1. Many Americans will see significant increases in their healthcare premiums. Additionally, it appears that several states won't pay out Supplemental Nutrition Assistance Program (SNAP) benefits, a key nutrition supplement program for low-income families. Off-year elections will take place on November 4. While they don't have direct implications for the government shutdown, they will be an important barometer of the political mood. Virginia s gubernatorial election also will feature a disproportionately high number of voters impacted by the shutdown. November 21 marks the expiration date for the House-passed government funding bill. It also is the start of Thanksgiving week, a period of heavy air-travel where staffing shortages could impact the experiences of many travelers. It's unlikely that any one of these events will spur Congress into action, but the culmination of some or all of them will increase pressure for the two sides to work out an end to the shutdown.
The Trump Factor. President Trump has been relatively hands-off throughout the shutdown fight, letting Senate Majority Leader John Thune (R-SD) and House Speaker Mike Johnson (R-LA) take the lead for Republicans. The administration has diverted unused funds to pay active-duty military service members and is looking for additional funds for SNAP benefits (but that becomes increasingly harder to accomplish as the shutdown drags on). President Trump has shown little interest in negotiating with Democrats. He has turned his focus to other matters (particularly trade and foreign affairs) and embarks today on his second foreign trip since the shutdown began. Democrats are still holding out that Trump may force Republicans to make some sort of compromise around the expiring healthcare subsidies (such as a year-long extension). Trump has stayed firm, but he may get impatient if there is increasing public frustration with the shutdown and with increases in health insurance premiums.
The Fight. Most government shutdowns in our nation s history have taken place over the past thirty years. In a hyper-partisan political environment, it has become important for political leaders to demonstrate that they are willing to take on the other side and fight for their principles. Recent polling shows that Democratic voters have shifted to supporting a shutdown in support of their principles. This had been the case for Republican voters for a few years already. For many, the fight has become more important than results.
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