Partial government shutdown is unlikely to roil US economy, Moody's says

A partial government shutdown that began early Saturday will likely have little impact on the U.S. economy.

According to Moody’s vice president and senior credit officer William Foster, a brief shutdown of the government will cause “minimal disruption” to the economy, and wouldn’t have a material impact on the United States’ sovereign credit profile.

“While a shutdown would halt federal discretionary spending, spending on mandatory programs such as Social Security and other social programs would continue, as would principal and interest payments on U.S. government debt,” he said in a statement.

In the case of a protracted government shutdown, Moody’s would reevaluate the situation on a case-by-case scenario.

The federal government shutdown early Saturday as congressional leaders -- and President Trump -- failed to strike a bipartisan funding deal, after publicly feuding about how much money to give toward the U.S.-Mexico border wall.

Potentially extending the length of a shutdown is the fact that Democrats will take control of the House next year. The Senate also needs a 60-vote threshold to pass funding legislation, but Republicans only hold 51 seats (in 2019, they’ll have control of 53).

Negotiations are continuing on Saturday, with the House and Senate both scheduling sessions.

Concerns about a shutdown began over a stand-off between Trump and Democrats over how much money a wall along the U.S.-Mexico border needs. Democrats have repeatedly refused to give Trump the $5 billion he wants to build the wall, a keystone of his 2016 campaign.