President Donald Trump has backed down on his first effort to secure funding for a border wall with Mexico to avoid a shutdown of the US federal government.
Democrats have objected to Trump’s insistence funding to build a Mexican border wall be included in the bill.
Trump’s advisor Kellyanne Conway confirmed to Fox News last night the wall will not be included in the funding bill. However, Trump has insisted on Twitter the wall will be built.
The executive branch must gain approval from 60 of the 100-member Senate to pass a law authorising spending on day-to-day government operations. It can currently count on the support of 52 Republican senators.
The government also faces obstacles in passing measures which would remove funding for Obamacare and increased defence spending.
A failure to pass the bill would be an embarrassing political failure, with hundreds of thousands of federal workers affected by the shutdown starting on Trump’s 100th day in office if no agreement is reached.
The government shutdown is unlikely to have major impacts on markets, but it could set the stage for a more important showdown in the future over the debt ceiling, which limits the borrowing of the US Treasury. Any limit on borrowing would raise the prospect of the US government defaulting on debt, which would trigger global financial crisis.
The government has shut down before in 2013 when the Republican party refused to pass a bill funding the Affordable Care Act, or “Obamacare”. Non-essential government agencies, such as national parks, museums and regulatory agencies amongst many others were forced to temporarily close.
The proposed wall with Mexico was one of Trump’s central campaign pledges. However, while Trump insisted Mexico would pay for the wall, their immediate refusal has forced the administration to look for other ways to fund it.
Read more: Gold prices approach the key $1,300 mark
In a campaign document Trump promised a law within his first 100 days that “fully-funds the construction of a wall on our southern border with the full understanding that the country of Mexico will be reimbursing the United States for the full cost of such wall.”
However, with the 100-day mark rapidly approaching Trump has not managed to pass a bill, which would be deeply controversial.