US: Congress Running Out Of Time To Avert DHS Shutdown

Congress is running out of time to avert a shutdown of the Department of Homeland Security on February 13. For markets, the impact of a shutdown will be limited as the vast majority of the federal government - including agencies that produce key data releases - are funded through September. 

• Lawmakers have several options, none of which appear likely at this stage: They could strike a deal on a full-year funding bill; pass another short stopgap measure to buy more time to negotiate over immigration operations; or pass a full-year stopgap to keep funding at Biden-era levels for agencies under the purview of the DHS. 
• Politico reports that Democrats sent draft legislation to Republicans on Sunday that would "codify the immigration enforcement guardrails," including "new judicial warrant requirements and limits on masking by federal agents.”
• Punchbowl writes, “Congress passing a bipartisan deal to fund DHS through Sept. 30 by the Friday deadline seems very unlikely. In fact, an agreement may not be possible at all as the two sides remain far apart."
• The Hill notes, “A DHS shutdown would have implications beyond immigration agencies, also bringing other federal agencies within the department to a halt, including the Transportation Security Administration (TSA), the Federal Emergency Management Agency (FEMA), the U.S. Coast Guard, and the Secret Service.” According to Polymarket, the implied probability of a DHS shutdown is just over 70%. 

Figure 1: Another US government shutdown by February 14?

Source: Polymarket