Trump cancels funding talks, federal government shutdown crisis is imminent!
2025-09-24 11:30:52
#Funding disputes have always been a focal point of partisan wrangling in American politics, and this conflict has pushed the federal government to the brink of a shutdown. On Tuesday (September 23), US President Trump abruptly canceled funding talks with top congressional Democratic leaders, putting the government at risk of a partial shutdown starting next week. This not only leaves hundreds of thousands of federal employees facing unpaid furloughs, but also puts a range of public services at risk. What exactly led to this impasse? Why are the two parties so locked in a tit-for-tat over funding? Let's delve deeper into the origins and development of this political storm.
The issue of federal government funding in the United States has always been a politically sensitive topic, and this year's debate has been particularly intense. Current federal funding expires on September 30th. If a new funding agreement cannot be reached before the deadline, the government will be forced into a partial shutdown starting on October 1st, the beginning of the new fiscal year. This means that many public services may be suspended, and hundreds of thousands of federal employees will face unpaid leave, potentially affecting sectors such as healthcare, education, and transportation.
At the heart of the issue lies so-called "discretionary funds," which account for about a quarter of the $7 trillion federal budget and support day-to-day government operations. However, due to deep disagreements between the two parties over how to allocate this funding, Congress has been unable to pass a new appropriations bill. Last week, the Republican-controlled House of Representatives passed a stopgap funding bill extending the funding period until November 21st, but the bill failed in the Democratic-controlled Senate. Disagreements between the two parties over the bill's content have led to a stalemate in appropriations negotiations.
Just as the outside world was hoping that the two parties could resolve the crisis through negotiations, Trump's decision undoubtedly added fuel to the fire. On September 23, Trump issued a statement on the social media platform Truth Social, announcing the cancellation of his meeting with Democratic leaders, citing "the impossibility of any meeting with them to be productive." This statement further escalated the already tense situation.
In a lengthy social media post, Trump lashed out at the Democrats, accusing them of pushing "radical left-wing policies," including high taxes, open borders, condoning violent crime, allowing men to participate in women's sports, and taxpayer-funded sex reassignment surgery. He stated that he would only consider meeting with leaders of both parties if they were "serious about the future of our country." However, Trump did not specify his conditions, further fueling pessimism about the prospects for negotiations.
Meanwhile, Democratic leaders quickly responded. Senate Democratic Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries stated that Trump had previously agreed to hold talks at the White House this week to resolve the funding issue. In a statement, Schumer criticized Trump and Republicans for "holding the American people hostage" and stressed that Democrats were ready to work together to avert a government shutdown. The mutual accusations between the two sides have further complicated the political game and undermined public confidence in the government's ability to function properly.
The difficulty in passing the appropriations bill stems from fundamental differences between the two parties over policy priorities. Republicans believe Democrats are deliberately obstructing the appropriations process due to their personal opposition to Trump. They accuse Democrats of inserting too many provisions into the bill that are irrelevant to appropriations, attempting to exploit them to advance their own political agenda. Democrats, on the other hand, insist that the appropriations bill must address critical social issues, particularly healthcare funding needs. They believe the Republican stopgap appropriations bill is too simple and fails to adequately ensure the continuity of public services.
Furthermore, the deep divisions within Congress make passage of bills exceptionally difficult. In the House of Representatives, while Republicans hold a majority, internal factional fighting makes it difficult to unify their positions. In the Senate, while Democrats hold an advantage, they also face challenges from dissenting voices within their own party. Passing a temporary appropriations bill requires sufficient votes in both chambers, a near-impossible task in the current political climate.
If the federal government were to shut down on October 1st, the consequences would be far-reaching. A shutdown would result in the closure of many non-essential departments, including public facilities like national parks and museums, and the suspension of some federal agency services. Hundreds of thousands of federal employees could be forced to take unpaid leave, which would not only affect their livelihoods but also have a ripple effect on the economy. Furthermore, while core services like Social Security and Medicare would generally continue to operate, related administrative work could be disrupted due to funding shortages.
The US federal government has experienced 14 partial shutdowns since 1981. Each has sparked public discontent and economic uncertainty. However, because the White House Office of Budget and Management (OMB) has yet to release contingency plans for various agencies, it remains unclear which departments will be prioritized for closure and which services will be able to continue operating if funding runs out. This uncertainty has further exacerbated public anxiety.
With the impending funding deadline looming, the focus is on whether the two parties can reach a last-minute compromise. Trump's intransigence and the Democrats' insistence cast a shadow over the prospects for negotiations. However, historical experience shows that under the pressure of a government shutdown, the two parties often reach a last-minute temporary agreement to avoid greater political and economic losses.
For Trump, canceling the meeting may be an attempt to show toughness to his supporters while putting pressure on Democrats. However, this strategy could also backfire. If a government shutdown were to occur, public discontent could shift toward Republicans. Democrats, on the other hand, would have to balance their own policy demands with their responsibility to avoid a shutdown, lest they be accused of irresponsibility.
Simply put, this event may push up gold prices in the short term, but the long-term impact depends on the duration of the shutdown and the economic chain reaction.
Historical data shows that during the 35-day shutdown of 2018-2019 (the longest in US history), gold prices saw only a modest rise of approximately $20, but overall remained resilient, avoiding significant fluctuations. Similarly, during the 16-day shutdown in October 2013, gold prices rose slightly from approximately $1,300 per ounce to $1,313 per ounce, an increase of less than 0.2%. These examples suggest that if the shutdown is brief (e.g., resolved within a week), gold prices are likely to experience only a modest rebound, limited to 1%-2%, primarily driven by safe-haven demand. However, if the impasse is prolonged, similar to the debt ceiling crisis, market panic will intensify, attracting more funds into gold ETFs or physical gold bars, and gold prices may once again break through historical highs.
At 11:29 Beijing time, spot gold was trading at $3,760.83 per ounce.
Funding crisis escalates, looming government shutdown
The issue of federal government funding in the United States has always been a politically sensitive topic, and this year's debate has been particularly intense. Current federal funding expires on September 30th. If a new funding agreement cannot be reached before the deadline, the government will be forced into a partial shutdown starting on October 1st, the beginning of the new fiscal year. This means that many public services may be suspended, and hundreds of thousands of federal employees will face unpaid leave, potentially affecting sectors such as healthcare, education, and transportation.
At the heart of the issue lies so-called "discretionary funds," which account for about a quarter of the $7 trillion federal budget and support day-to-day government operations. However, due to deep disagreements between the two parties over how to allocate this funding, Congress has been unable to pass a new appropriations bill. Last week, the Republican-controlled House of Representatives passed a stopgap funding bill extending the funding period until November 21st, but the bill failed in the Democratic-controlled Senate. Disagreements between the two parties over the bill's content have led to a stalemate in appropriations negotiations.
Trump cancels talks, both sides blame each other
Just as the outside world was hoping that the two parties could resolve the crisis through negotiations, Trump's decision undoubtedly added fuel to the fire. On September 23, Trump issued a statement on the social media platform Truth Social, announcing the cancellation of his meeting with Democratic leaders, citing "the impossibility of any meeting with them to be productive." This statement further escalated the already tense situation.
In a lengthy social media post, Trump lashed out at the Democrats, accusing them of pushing "radical left-wing policies," including high taxes, open borders, condoning violent crime, allowing men to participate in women's sports, and taxpayer-funded sex reassignment surgery. He stated that he would only consider meeting with leaders of both parties if they were "serious about the future of our country." However, Trump did not specify his conditions, further fueling pessimism about the prospects for negotiations.
Meanwhile, Democratic leaders quickly responded. Senate Democratic Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries stated that Trump had previously agreed to hold talks at the White House this week to resolve the funding issue. In a statement, Schumer criticized Trump and Republicans for "holding the American people hostage" and stressed that Democrats were ready to work together to avert a government shutdown. The mutual accusations between the two sides have further complicated the political game and undermined public confidence in the government's ability to function properly.
What are the differences between the two parties? Why is the appropriations bill so difficult to pass?
The difficulty in passing the appropriations bill stems from fundamental differences between the two parties over policy priorities. Republicans believe Democrats are deliberately obstructing the appropriations process due to their personal opposition to Trump. They accuse Democrats of inserting too many provisions into the bill that are irrelevant to appropriations, attempting to exploit them to advance their own political agenda. Democrats, on the other hand, insist that the appropriations bill must address critical social issues, particularly healthcare funding needs. They believe the Republican stopgap appropriations bill is too simple and fails to adequately ensure the continuity of public services.
Furthermore, the deep divisions within Congress make passage of bills exceptionally difficult. In the House of Representatives, while Republicans hold a majority, internal factional fighting makes it difficult to unify their positions. In the Senate, while Democrats hold an advantage, they also face challenges from dissenting voices within their own party. Passing a temporary appropriations bill requires sufficient votes in both chambers, a near-impossible task in the current political climate.
The impact and historical review of government shutdowns
If the federal government were to shut down on October 1st, the consequences would be far-reaching. A shutdown would result in the closure of many non-essential departments, including public facilities like national parks and museums, and the suspension of some federal agency services. Hundreds of thousands of federal employees could be forced to take unpaid leave, which would not only affect their livelihoods but also have a ripple effect on the economy. Furthermore, while core services like Social Security and Medicare would generally continue to operate, related administrative work could be disrupted due to funding shortages.
The US federal government has experienced 14 partial shutdowns since 1981. Each has sparked public discontent and economic uncertainty. However, because the White House Office of Budget and Management (OMB) has yet to release contingency plans for various agencies, it remains unclear which departments will be prioritized for closure and which services will be able to continue operating if funding runs out. This uncertainty has further exacerbated public anxiety.
Where does the future lie? What's the solution to the funding impasse?
With the impending funding deadline looming, the focus is on whether the two parties can reach a last-minute compromise. Trump's intransigence and the Democrats' insistence cast a shadow over the prospects for negotiations. However, historical experience shows that under the pressure of a government shutdown, the two parties often reach a last-minute temporary agreement to avoid greater political and economic losses.
For Trump, canceling the meeting may be an attempt to show toughness to his supporters while putting pressure on Democrats. However, this strategy could also backfire. If a government shutdown were to occur, public discontent could shift toward Republicans. Democrats, on the other hand, would have to balance their own policy demands with their responsibility to avoid a shutdown, lest they be accused of irresponsibility.
Simply put, this event may push up gold prices in the short term, but the long-term impact depends on the duration of the shutdown and the economic chain reaction.
Historical data shows that during the 35-day shutdown of 2018-2019 (the longest in US history), gold prices saw only a modest rise of approximately $20, but overall remained resilient, avoiding significant fluctuations. Similarly, during the 16-day shutdown in October 2013, gold prices rose slightly from approximately $1,300 per ounce to $1,313 per ounce, an increase of less than 0.2%. These examples suggest that if the shutdown is brief (e.g., resolved within a week), gold prices are likely to experience only a modest rebound, limited to 1%-2%, primarily driven by safe-haven demand. However, if the impasse is prolonged, similar to the debt ceiling crisis, market panic will intensify, attracting more funds into gold ETFs or physical gold bars, and gold prices may once again break through historical highs.
At 11:29 Beijing time, spot gold was trading at $3,760.83 per ounce.
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