The government shutdown continues due to deadlock over border wall funding. President Trump is demanding $5.7 billion in funding for his proposed wall at the US-Mexico border; however, Congressional Democrats are only willing to budget $1.6 billion for the entire border defense budget. Approximately 25% of the federal government has been shut down because of this and 800,000 workers have been affected, 350,000 of which are not receiving pay. Many are worried about the long-term ramifications of the shutdown. Many feared the IRS wouldn't be able to process their tax returns, though the Trump administration sought to assuage these fears on Monday. There's no word yet on how food stamps and other essential services might be impacted.
The Republican-controlled House passed a bill late December that would fund several key government agencies until February 8th and push the discussion over wall funding to the next Congress. The Senate, which was controlled by Republicans until January 3, 2019, was unable to pass the bill, as they needed the cooperation of at certain number of Democrats to reach the 60-vote mark.
President Trump has stated that he is unwilling to compromise. In a series of posts on Twitter, President Trump has blamed Democrats for the shutdown," stating that he would be "proud to shut down the government for border security," an issue pivotal to his presidential campaign. President Trump also tweeted that "The Democrats, whose votes we need in the Senate, will probably vote against Border Security and the Wall even though they know it is DESPERATELY NEEDED," that "If the Dems vote no, there will be a shutdown that will last for a very long time," and that "People don't want Open Borders and Crime!"
Since the shutdown began - it's now more than two weeks since its start - control of the House has shifted to the Democrats. Democrats have drafted multiple bills that would fund the government through fall of 2019. Since they don't contain the $5.7 billion requested, these bills are dead in the water. Trump has held several meetings with high-ranking members of Congress. Trump has alternated between calling these meetings "productive" and venting his frustrations with the Democrats. The Democrats have expressed clearly that Trump has told them he's willing to let the shut down drag on for months or years until he has his way. As per the latest negotiations on Monday, Trump is now asking for the original $5.7 billion towards the construction of a steel wall, along with an extra $800 million to address the "border crisis." He didn't detail further what the funds would be used for or why he needed to ask for more at this time.
The market has also responded to this government shutdown with continued volatility. Deadlock initially pushed numbers sharply lower. Durable stable goods climbed while biotechnology, software, commercial real estate and chemical stocks saw considerable weakness. The market has seen a slight rally thanks to unrelated issues, such as a drop in oil supply and rebounding tech stocks.
Polls show that the shutdown is not reflecting well on politicians from either side of the aisle. Trump's approval rating is also at a dismal 39%.