The US administration narrowly suspended a new government blockade. A close vote allows the deadline to be pushed back, without settling the substance. The American economy is booming, but remains unstable.
In brief
- The US Congress adopts a temporary budget to avoid a total shutdown of the federal economy.
- DHS funding remains on hold, signaling another looming political confrontation.
A temporary budget to save the economy from the impasse
Tuesday, February 3, the House of Representatives adopted a 1.2 trillion dollar bill. The latter was signed immediately by Donald Trump. This decision ends a three-day shutdown, paralyzing several public services.
The measurement allows fund the majority of federal agencies until September 30. One exception: the Department of Homeland Security (DHS), whose activities receive two weeks of interim funding.
THE Congress was divided until the last minute. The vote was 217 votes to 214, illustrating strong political tension. This maneuver avoids prolonged paralysis which would have profoundly affected the country's economy. It nevertheless leaves the shadow of a recession looming if a new agreement is not found by February 13.
The American economy faces persistent political instability
Beyond the simple vote, the episode reveals the structural fragility of American budgetary functioning. The specter of the deficit remains omnipresent. The Trump administration, which wanted to cut several public finance positions, had to back down on certain fronts.
The final agreement thus provides a cut of 11.6 billion dollars in IRS modernization funds. Which weakens its digital transformation strategy.
Federal civil servants placed on forced leave will receive retroactive payment, thus limiting the direct impact on domestic consumption. However, this measure does not solve the structural problems. The next battle around DHS funding could reignite tensions. Especially since nearly 80% of this agency's budget concerns non-migratory areas, such as FEMA or the TSA.
The next few weeks therefore promise to be decisive. A new budgetary clash could plunge the United States economy back into uncertainty. The reprieve does not guarantee lasting stability. To be continued…
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