The government shutdown is over for now, but Washington will be back on the brink in less than 3 weeks, unless the Republicans and Democrats can work out a solution to their major differences over immigration reform.
Yesterday Republicans in Capitol Hill seemingly took the advice of Senator Rand Paul on board, after he said they should give Democrats the chance to have a debate over immigration and more specifically the Obama-era DACA order in order to end the gridlock.
The party did just that, and in response the Democratic leadership agreed to back a spending bill that ended the standoff in Washington for the time being, passing the Senate by a majority of 81-18 and the House of Representatives by 266-150 on Monday.
Despite the news which Trump hailed as a “Big win” for the GOP, Republican leaders are under increasing pressure from their own members to reach a long-term budget agreement by Feb. 8. The problem is that in order to do that, they will need Democrat support, and the two parties are massively divided on what should be done in terms of immigration reform in the U.S.
The Trump administration has made it clear that it takes a hard line stance on illegal immigration, and has already been responsible for large scale deportations. ICE (Immigration and Customs Enforcement) arrests rose significantly during the President’s first 100 days in office, compared with the same period a year before under Obama, while ICE also requested a $1.2 billion increase in funding for the next fiscal year, seeking to expand immigrant detention centres and taking on an additional 1,600 staff.
As a liberal left-leaning party, naturally the Democrats have taken a firm stance against Republicans on the issue, particularly on the rights of the ‘Dreamers’, illegal immigrants who were brought to the U.S. as children. Originally they had said they wouldn’t let a bill pass to fund the government if it didn’t include protection for the migrants, but yesterday they caved on the issue in return for a debate over it instead, prompting condemnation from immigration activists.
In the markets, a majority of U.S. stocks rose Tuesday, with major indices pushing forward once again to record levels only a day after a partial shutdown ended.
It looks as if the political stalemate had practically no impact on stocks whatsoever, though arguably the end removed an element of political uncertainty from the market, allowing investors to focus more fully on corporate earnings, which have so far been strong, albeit with the variable of the recently passed tax law.
Democrats and Republicans may have avoided a long shutdown on this occasion, but the critical issue still lurks beneath the surface.