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Both parties see some upside
The growing sense in Washington is that the latest government funding fight between Republicans and Democrats is shaping up differently.
And why things may be more likely to end in a shutdown is simple: Not only are both parties OK with a funding stoppage, but some partisans even view the idea of going through with it as an opportunity or political necessity.
Markets, meanwhile, have grown accustomed to tuning out Washington’s regular displays of brinksmanship. But Wall Street may turn to the issue in earnest starting Monday, when lawmakers return with less than 48 hours before a partial government shutdown could take effect on Oct. 1 at 12:01 a.m. ET.
The latest example of how the current funding fight is playing out differently — with political pressure seeming to push in the direction of shutdown — came late on Wednesday when President Trump’s White House asked federal agencies to consider mass firings as part of their shutdown planning efforts.
It’s a way for Trump’s team to accomplish previously unrelated goals — those often expressed by the Department of Government Efficiency (DOGE) — in a different manner, with the memo saying firings could be focused on areas “not consistent with the president’s priorities.”
It was also a move intended to increase the pressure on Democrats.
Whether it causes Senate Majority Leader Chuck Schumer and others to blink remains to be seen, but the new threat is just one factor Democrats are weighing, as they often note a shutdown as one of their vanishingly few points of leverage.
Party leaders are also answerable to a Democratic base that appears to be fine with a shutdown — especially if the only alternative is seen as “bending the knee” to Trump.
Washington being Washington, an abrupt end to the standoff is always possible. But the increased odds are a sign that more and more people, both in Washington and on Wall Street, are beginning to believe Schumer when he says, as he told reporters recently in reference to the last standoff, “The world is totally changed from March.”
As Signum Global Advisors recently noted to clients, “Our base case has, and continues to be, that the government will shut down on October 1.” Others are offering a similar scenario, with above-even odds for the time being that Wednesday dawns with government offices closed.
Read more: How a government shutdown would affect your student loans, Social Security, and more
Trump has slammed Democrats, saying they will be to blame, but the president has evinced little public concern about whether he would be hurt by a stoppage — saying at one point, “We could very well end up with a closed country for a period of time.”
