The widening partisan divide in the US could prolong the government shutdown due to a $1.2 trillion deadlock, and political dysfunction is destroying America's credibility.
2026-02-03 10:49:33
The political deadlock surrounding the $1.2 trillion spending bill has pushed the partial government shutdown crisis in the United States to a new tipping point. This congressional storm, ignited by the immigration dispute, not only highlights the sharp divisions within the Democratic Party but also exposes the governance dilemma of political polarization in the United States.
This political storm, triggered by immigration disputes and fiscal appropriations, is essentially a classic example of how political polarization in the United States is damaging its financial credibility. It directly creates a favorable environment for gold prices, while simultaneously posing multiple challenges to the US dollar, from short-term trading to long-term creditworthiness. Investors should closely watch whether the non-farm payroll data will be released as scheduled this Friday, as this will be a litmus test for market sentiment.
On Tuesday (February 3) during the Asian session, the US dollar index fluctuated narrowly around 97.53; spot gold fluctuated and strengthened, currently trading around $4,740 per ounce, with a daily increase of about 2%.
The U.S. House of Representatives is embroiled in political turmoil over President Donald Trump’s immigration policies, which could lead to an extension of the partial government shutdown that began last Saturday.
Just as a massive $1.2 trillion spending bill is set to be submitted to the full House for a vote as early as Tuesday, senior Democratic lawmakers are sharply divided on the bill, highlighting the intense divisions within the Democratic Party over this massive spending plan .
House Speaker Mike Johnson faces a tricky path in pushing forward a bill that has already passed the Senate. The bill, a product of negotiations between Trump and Democratic leader Chuck Schumer, would fund most federal agencies until September 30 and the Department of Homeland Security until February 13.
On Monday, Representative Rosa DeLauro, a Democrat from Connecticut and a Democrat on the House Appropriations Committee, said she would vote in favor of the bill when it is submitted for a vote on Tuesday—a move that breaks with a large group of colleagues who oppose the measure because it includes funding for the Department of Homeland Security, which covers immigration enforcement operations.
"I will support this bill," DeLauro said at a rules committee meeting on Monday. She noted that the bill provides funding for five full-fledged annual bipartisan appropriations bills and extends Department of Homeland Security funding to current levels for 10 days.
DeLauro stated that without temporary funding for the Department of Homeland Security, Democrats would "be unable to exert the necessary pressure" to push for changes to the full-year Department of Homeland Security funding bill currently being negotiated with the White House.
But Jim McGovern, the ranking Democrat on the rules committee and a representative from Massachusetts, said he strongly opposes the bill because it includes funding for the Department of Homeland Security.
He stated, "I cannot vote for such a bill when masked agents break into homes without legal authorization, violating the Fourth Amendment."
However, neither leader (the House Democratic and Republican leaders) is expected to vote in favor of a key procedural motion aimed at scheduling a final debate and vote on the massive bill that passed the Senate last Friday.
This motion, dubbed the "rule," is also expected to trigger a vote on contempt of Congress charges against Bill Clinton and Hillary Clinton for their lack of cooperation during the oversight committee's investigation into Jeffrey Epstein. Republican leadership is vying for support for the motion as some Republicans push for amendments, including an additional partisan option bill.
House Minority Leader Hakim Jeffries said Monday, "Republicans have a responsibility to push this rule motion forward, which, incidentally, includes many other issues that we strongly oppose."
If the government shutdown continues this week, it could trigger a series of chain reactions. The highly anticipated U.S. Labor Department's non-farm payroll report may not be released as scheduled this Friday, impacting financial market decision-making. Meanwhile, the tax season, which began last week, may also be disrupted or delayed, directly impacting taxpayers and tax service agencies.
As the shutdown continues, the impact will spread further: government contractors will face wage payment disruptions and service delivery delays, while a large number of non-essential government employees may be forced into unpaid leave, thus creating a wider ripple effect on overall economic activity and social operations.
The current situation is essentially a "political dysfunction"—serious divisions between the two parties and within those parties over issues such as immigration and funding have jeopardized basic government operations and the release of key economic data. This domestic political failure in the United States will directly weaken the long-term appeal of the US dollar while increasing the safe-haven value of gold.
A government shutdown is itself a signal of a political crisis. Markets abhor uncertainty, and funds will naturally flow to traditional safe-haven assets such as gold.
Global investors hold US dollars based on their trust in the political stability and institutional effectiveness of the United States. The current open and intense political divisions and legislative paralysis will erode this foundation of trust, potentially prompting central banks and sovereign wealth funds to reassess the proportion of US dollars in their foreign exchange reserves, constituting a long-term structural headwind.
(Spot gold daily chart, source: FX678)
At 10:49 Beijing time, spot gold is trading at $4,753.39 per ounce.
This political storm, triggered by immigration disputes and fiscal appropriations, is essentially a classic example of how political polarization in the United States is damaging its financial credibility. It directly creates a favorable environment for gold prices, while simultaneously posing multiple challenges to the US dollar, from short-term trading to long-term creditworthiness. Investors should closely watch whether the non-farm payroll data will be released as scheduled this Friday, as this will be a litmus test for market sentiment.
On Tuesday (February 3) during the Asian session, the US dollar index fluctuated narrowly around 97.53; spot gold fluctuated and strengthened, currently trading around $4,740 per ounce, with a daily increase of about 2%.
Government shutdown crisis reignites: Immigration dispute sparks parliamentary storm
The U.S. House of Representatives is embroiled in political turmoil over President Donald Trump’s immigration policies, which could lead to an extension of the partial government shutdown that began last Saturday.
Just as a massive $1.2 trillion spending bill is set to be submitted to the full House for a vote as early as Tuesday, senior Democratic lawmakers are sharply divided on the bill, highlighting the intense divisions within the Democratic Party over this massive spending plan .
House Speaker Mike Johnson faces a tricky path in pushing forward a bill that has already passed the Senate. The bill, a product of negotiations between Trump and Democratic leader Chuck Schumer, would fund most federal agencies until September 30 and the Department of Homeland Security until February 13.
The Democratic Party is divided: a battle between supporters and opponents.
On Monday, Representative Rosa DeLauro, a Democrat from Connecticut and a Democrat on the House Appropriations Committee, said she would vote in favor of the bill when it is submitted for a vote on Tuesday—a move that breaks with a large group of colleagues who oppose the measure because it includes funding for the Department of Homeland Security, which covers immigration enforcement operations.
"I will support this bill," DeLauro said at a rules committee meeting on Monday. She noted that the bill provides funding for five full-fledged annual bipartisan appropriations bills and extends Department of Homeland Security funding to current levels for 10 days.
DeLauro stated that without temporary funding for the Department of Homeland Security, Democrats would "be unable to exert the necessary pressure" to push for changes to the full-year Department of Homeland Security funding bill currently being negotiated with the White House.
Fierce Opposition: Conflict between Constitutional Rights and Immigration Enforcement
But Jim McGovern, the ranking Democrat on the rules committee and a representative from Massachusetts, said he strongly opposes the bill because it includes funding for the Department of Homeland Security.
He stated, "I cannot vote for such a bill when masked agents break into homes without legal authorization, violating the Fourth Amendment."
However, neither leader (the House Democratic and Republican leaders) is expected to vote in favor of a key procedural motion aimed at scheduling a final debate and vote on the massive bill that passed the Senate last Friday.
Additional topics: The political entanglement from the Clinton investigation to election laws
This motion, dubbed the "rule," is also expected to trigger a vote on contempt of Congress charges against Bill Clinton and Hillary Clinton for their lack of cooperation during the oversight committee's investigation into Jeffrey Epstein. Republican leadership is vying for support for the motion as some Republicans push for amendments, including an additional partisan option bill.
House Minority Leader Hakim Jeffries said Monday, "Republicans have a responsibility to push this rule motion forward, which, incidentally, includes many other issues that we strongly oppose."
Impact analysis of continued government shutdown
If the government shutdown continues this week, it could trigger a series of chain reactions. The highly anticipated U.S. Labor Department's non-farm payroll report may not be released as scheduled this Friday, impacting financial market decision-making. Meanwhile, the tax season, which began last week, may also be disrupted or delayed, directly impacting taxpayers and tax service agencies.
As the shutdown continues, the impact will spread further: government contractors will face wage payment disruptions and service delivery delays, while a large number of non-essential government employees may be forced into unpaid leave, thus creating a wider ripple effect on overall economic activity and social operations.
Uncertainty is a friend of gold and an enemy of the dollar.
The current situation is essentially a "political dysfunction"—serious divisions between the two parties and within those parties over issues such as immigration and funding have jeopardized basic government operations and the release of key economic data. This domestic political failure in the United States will directly weaken the long-term appeal of the US dollar while increasing the safe-haven value of gold.
A government shutdown is itself a signal of a political crisis. Markets abhor uncertainty, and funds will naturally flow to traditional safe-haven assets such as gold.
Global investors hold US dollars based on their trust in the political stability and institutional effectiveness of the United States. The current open and intense political divisions and legislative paralysis will erode this foundation of trust, potentially prompting central banks and sovereign wealth funds to reassess the proportion of US dollars in their foreign exchange reserves, constituting a long-term structural headwind.
(Spot gold daily chart, source: FX678)
At 10:49 Beijing time, spot gold is trading at $4,753.39 per ounce.
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