Circumvent Congress to send money? Trump signs executive order for emergency funding, hoping to break the shutdown deadlock?

The 汇通财经 APP reports - U.S. President Trump announced on Thursday (March 26) that he will sign an executive order directing Homeland Security Secretary Mark Wayne Mullen to immediately pay Transportation Security Administration (TSA) staff in order to quickly alleviate the airport security chaos caused by the DHS funding impasse.

This executive intervention aims to stabilize air travel order and prevent further losses for travelers due to security delays. Currently, TSA security personnel have been absent en masse due to unpaid work, leading to long queues at airports across the United States.

Core Content of the Executive Order

Trump stated that he will sign an executive order requiring Homeland Security Secretary Mullen to immediately initiate pay procedures for TSA staff. This order bypasses the congressional funding deadlock and directly guarantees the wages of frontline security personnel through executive power.

Trump emphasized that this move is to quickly end the “chaos at airports caused by the Democrats” and urged Congress to swiftly reach a comprehensive DHS funding agreement. He pointed out that TSA employees working without pay for an extended period has severely impacted aviation safety and the traveler experience, which must be addressed immediately.

Background of the DHS Funding Impasse

Negotiations for DHS funding have been deadlocked for 41 days. Democrats insist on reforming the Immigration and Customs Enforcement (ICE) and have repeatedly pushed for separate funding for the TSA; Republicans insist on a complete DHS package and link it to election reform legislation.

Due to the failure to reach an agreement in negotiations, funding for non-immigration enforcement agencies like the TSA has run out, forcing many security personnel to work without pay, significantly reducing airport security efficiency and leading to frequent traveler delays. ICE, having previously received $75 billion in funding, continues to operate normally and pay salaries.

Current Status of Bipartisan Negotiations

Senate Minority Leader Chuck Schumer accused Republicans of repeatedly refusing to allocate separate funding for the TSA, which he claims is the root cause of the chaos. Republicans countered that the Democrats’ proposals lack sincerity and are unwilling to compromise on ICE reform issues.

Trump’s executive order provides an administrative means to stabilize the situation in the short term, but the long-term funding issue still requires Congress to pass a formal appropriations bill. Currently, Congress has only one day left before a two-week recess, increasing the pressure for negotiations.

Analysis of Impact on the Dollar

In the short term, supported by the strengthened framework of Federal Reserve policies, the dollar index fluctuated around 99.90 during the Asia trading session on Friday; in the medium term, it faces rising fiscal political risks, with the credit basis of the dollar presenting a “stable monetary policy, tightening fiscal coordination” divergence pattern.

(Dollar index daily chart, source: 易汇通)

Market Outlook and Risks

In the short term, if Trump’s executive order is quickly implemented, the TSA staff pay issue is expected to be resolved, and the airport chaos could be alleviated to some extent. However, if Congress fails to reach a comprehensive funding agreement before the recess, similar shutdown risks will continue to recur.

In the medium to long term, the fundamental resolution of the DHS funding impasse depends on bipartisan compromise on immigration enforcement reform and the overall appropriations plan. The absence of any long-term agreement could continue to impact border security, emergency responses, and the aviation sector. Investors and the public need to pay attention to the progress of negotiations before the weekend and Trump’s subsequent administrative actions.

As of 9:30 AM Beijing time, the dollar index is reported at 99.87.

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Editor: Guo Jian