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Another rousing game of government shutdown chicken

Congress appears to be gearing up for another round of chicken with the U.S. government's finances. At the heart of the issue is bickering in the House of Representatives over a proposed relief bill which would provide emergency funds to those affected by Hurricane Irene.

During the last negotation over the debt ceiling, the House and Senate agreed to a cap of a little over $1 trillion for the fiscal year, but House Republicans now claim that figure is too high. They seized on that point to vote against the funding bill, which was defeated by a margin of 35 votes.

Both Democrats and conservative Republicans turned against the measure; the former because it stripped funding for a loan program that supported the production of fuel-efficient vehicles, the latter because of the larger government spending issue.

With the failure of the bill, several threats loom. The Federal Emergency Management Agency may run out of cash early next week, leaving victims of the hurricane in the lurch. By the end of September, the broader government will also go unfunded unless the bill passes.

If the bill does pass in some form, it will kick the can down the road to November 18, when additional funding would need to be authorized.

Wall Street doesn't look very positive about this latest news - despite a drop in initial jobless claims, U.S. stock index futures declined. NASDAQ 100 futures were down 51.5 points to 2,194, while Dow Jones Industrial Index futures declined 276 points to 10,731 at 9:03 a.m. EST.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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