Stock futures fall as U.S. government shutdown commences

by 22 Jan, 2018

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Democrat Senate Minority Leader Chuck Schumer

The U.S. government is officially in shutdown mode with thousands of federal workers on furlough, after Republicans and Democrats in Washington failed to come to an agreement over the contents of a temporary funding bill designed to keep the government open.

The shutdown officially began from midnight on Friday the 19th of January, after Democrats including Chuck Schumer voted down a bill that would have allowed the government to keep funding federal departments, in order to try and force Republicans to make concessions over immigration reform and protect a group known as the ‘Dreamers’ (illegal immigrants brought to America as children) from deportation.

The Trump administration announced it would be ending the Obama-era DACA programme (Deferred Action for Childhood Arrivals) last September, with a 6-month delay for current recipients. The Democrats criticized the action, while Attorney General Jeff Sessions said the DACA policy from the Obama government was an “unconstitutional exercise of authority” by the executive branch.

Despite fears of a prolonged shutdown, Republican Senator Rand Paul believes he has a solution. Speaking to CNN host Jake Tapper on Sunday he said: “Here’s the answer to how you solve this today. Promise – guarantee in writing to the Democrats, that there will be 1 weeks debate on immigration, and a vote on an immigration bill sometime in the next month in the House and the Senate.” Paul argued that by opening up the immigration debate, it would increase the chances of a bipartisan solution.

The last U.S. government shutdown took place under Barack Obama in 2013, after members of both parties came to blows over new ‘Obamacare’ healthcare laws. In that instance around 800,000 federal employees were indefinitely furloughed and another 1.3 million were asked to work despite not having known payment dates. That action lasted 16 days.

In the markets, stock futures and the Dollar both fell ahead of today’s trading session, while the greenback began to trade lower against both the Euro and Pound.

Related: U.S. stock futures move higher despite shutdown risk

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