IHS Markit estimated, the United States (US) economy fell at a 35.3 percent in the second quarter, which subtracts about 25 percentage points from GDP growth - Photo by White House

JAKARTA (TheInsiderStories) – United States (US) Senate rejected the idea of ​​providing “big down payment” of President Donald Trump border wall proposal, as part of a solution to reopen a 34-days government shutdown.

Quoted by AP on Thursday (01/24), Congresswoman Nancy Pelosi from Democrat party said that the requesting was not a reasonable agreement between the senators. She also admitted that she did not yet know how much down payment Trump had offered.

In his statement, Trump once said that he was “deeply honored” that almost all Republican Senates chose proposals to trade funds for the US-Mexico border wall for temporary protection for some immigrants, although lawmakers rejected the bill.

It is one of two steps designed to end the partial closure of a failed government in the Senate on Thursday, he added. Democrats sponsor the second bill, but around 50 of the 53 Republican’ senators voted for Trump’ proposal.

The White House itself has confirmed that if there is no agreement for payment of advances, then Trump remains adamant not to accept a short-term agreement to reopen the government.

Republicans controlling the Senate have canceled Democrat efforts to temporarily reopen closed parts of the federal government. Polls have shown that the public blames Trump for closure and his approval number has diminished due to protracted deadlock.

The Democrats have blocked Trump’s request of $5.7 billion to build a long-sought wall along the US-Mexico border. The funding bill of more than $350 billion plus the government represents the first attempt by Republicans to control the Senate to reopen the government since the closure began.

The collapse of the move and the possible defeat of the Democratic alternative made Washington not have a clear solution to the stalemate despite increasing pressure. The move will also provide three years of protection against deportation for 700,000 immigrants who were taken illegally to the America.

Earlier, Pelosi had said that Democrats House was developing a new border security package that could provide a step towards compromise. It will include money for fences, technology, personnel, and other actions, but not for the wall proposed by Trump.

But Trump responded immediately by writing a statement via Twitter: “Nancy just said she “just does’ understand why? Very simply, without a Wall it all doesn’t work. Our Country has a chance to greatly reduce crime, Human Trafficking, Gangs and Drugs. Should have been done for decades. We will not Cave!”

With the impasse, lawmakers said they were willing to compromise border security and immigration policies.

The failure to find ways out of the longest US Federal Government shutdown in history, the ongoing trade war with China and the UK’s Brexit impasse risk dragging the US economy down to zero growth in 2019 – but a recession is unlikely, according to finance experts debating the future of America’s economy at the World Economic Forum Annual Meeting.

“The shutdown, if it continues, will be very problematic,” said Kenneth Rogoff, Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, USA. “The estimate of zero growth is not crazy at all,” he added.

Brian T. Moynihan, Chairman and Chief Executive Officer of Bank of America Corporation, was more bullish, estimating growth at 1.9 percent for 2019. His evidence includes strong employment, solid consumer activity and business optimism that is running higher than two to three years ago. For those fearing a recession, he recommends keeping an eye on declines in consumer spending and capital commitments.

Market unease may be due to the fact that, from June 2009 to the present, we’ve seen almost the longest period of US growth since World War II, so people naturally think something’s got to go wrong, said David Rubenstein, Co-Founder and Co-Executive Chairman, Carlyle Group.

Rubenstein said he expects the trade war with China to be resolved in the next two to three months as both sides realize they need to make moves or suffer greater consequences.

He also said he expects the shutdown to be resolved soon as Republicans and Democrats will both bear the blame the longer it drags on. However, “if we don’t resolve that [shutdown] in the reasonable future it will really impact the economy,” he added.

People should be wary of the $23 trillion of federal debt, maintained Rubenstein. Rogoff dismissed his concerns as a medium- to long-term problem, arguing that Republicans don’t think it matters as much as tax cuts and Democrats don’t think it matters as much as government spending.

However, with the US borrowing $1.2 trillion of its annual $4.2 trillion budget, that cannot be sustained – especially if interest rates rise, argued Rubenstein: “At some point the markets will wake up and say they can’t tolerate it,” he said.

Meanwhile, resentment among US workers is growing as President Trump fails to deliver on his campaign pledges of fairer trade rules and stronger labour protections. The $3.2 trillion deficit in investment in infrastructure – the solution of which was supposed to deliver strong job growth – has not moved, according to Elizabeth Shuler, Secretary-Treasurer and Chief Financial Officer, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), USA.

“We see an uprising across the country,” she said, as companies like Amazon and Uber join a “race to the bottom” in terms of workers’ pay and rights.

In Los Angeles, 30,000 teachers are picketing for more pay and lower class sizes. The government shutdown has left 800,000 federal workers on furlough or working without pay.

“If you heard what air traffic controllers and pilots are saying, you probably wouldn’t be flying back into the United States,” Shuler added, as essential manual checks on air traffic control systems go unperformed.

Written by Daniel Deha, Email: theinsiderstories@gmail.com