The US House of Representatives has passed a two-year budget to end a brief government shutdown and boost government spending limits by hundreds of billions of dollars, following the Senate’s approval of the measure early on Friday.
At about 5:30am in Washington, the House voted to approve the budget bill that passed the Senate just before 2am. The shutdown — the second of the year — began after midnight, with Senate passage held-up by Republican lawmaker Rand Paul.
The senator used a manoeuvre to delay voting in protest of his party pushing the legislation that is forecast to increase the budget deficit, something that is vehemently resisted by many Republicans. The shutdown followed a three-day closure three weeks ago that had a muted economic impact but frustrated federal workers.
Goldman Sachs estimates the two-year budget bill will increase the federal government’s spending authority in the current fiscal year that runs through the end of September by $143bn.
The fiscal year 2019 cap would be lifted by $153bn. As a result, the investment bank expects the deficit to be $25bn – $50bn larger in each of the next few years, bringing the deficit to $1.23tn by fiscal 2021.
The deficit, which is the difference between government income and outlays, would be one of the biggest outside of recessions and war-times.
Republican Paul Ryan, speaker of the House, applauded the legislation, saying in early-morning debate on the floor of the chamber: “Republicans and Democrats came together on a bipartisan measure. I think that is something to celebrate.” He also vowed to make a “sincere commitment” to “finding a solution” for the country’s “Dreamers”, or undocumented immigrants who came to the US as young children.
The remarks came just after Democrat Nancy Pelosi, minority leader, renewed her call for Congress to take action on immigration.
US President Donald Trump was uncharacteristically quiet on the shutdown that followed a violent trading day on Wall Street that saw the S&P 500 sink 3.8 per cent. Futures tracking the index neared session highs after the House passage, up 0.78 per cent in recent trade.
Source: Financial Times