The Democratic Party refuses to pass the Department of Homeland Security budget over the Minneapolis shooting case. If there is no breakthrough before January 30, the US government may face another shutdown.
(Background summary: The US government reopened after 43 days! Trump signed the bill late at night: Democrats and Biden caused the US to lose 1.5 trillion USD)
(Additional background: Arthur Hayes: If the Federal Reserve intervenes to “rescue the yen,” it will be extremely bullish for Bitcoin)

Table of Contents

• Shooting ignites funding deadlock
• Budget details and market risks
• Latest market forecast data

Last November, President Trump signed a temporary budget bill, officially ending the longest shutdown in US federal government history (43 days). However, in less than three months, the risk of another shutdown has re-emerged.

Democratic leader Chuck Schumer announced earlier this week that if the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) are not reformed in terms of authority and budget, the Democrats will block any temporary spending bills, even if it means shutting down the government. The deadline for funding is less than a week away on January 30.

Shooting ignites funding deadlock

The trigger was the shooting on January 24 in Minneapolis, where 37-year-old citizen Alex Pretti was shot and killed by border patrol agents. This is the second similar incident in three weeks in the city, further amplifying recent public doubts about ICE enforcement methods.

Politico reported that Democrats believe the current $10 billion ICE funding still allocates too many resources for deportation and detention, making tragedies unavoidable. Schumer stated in a press release:

If the Republicans do not accept real oversight and accountability, this money should not be approved.

The House of Representatives passed H.R. 7147, which includes DHS funding, on the 22nd of this week. However, the bill requires 60 votes in the Senate, meaning at least 8 Democrats must defect. After Schumer’s firm stance, several Democratic lawmakers, including Chris Murphy and Alex Padilla, publicly support rewriting the budget.

Budget details and market risks

The current version cuts $1.8 billion in border spending and reduces ICE detention beds by 5,500. An additional $20 million is allocated for purchasing body cameras for officers and de-escalation training. The Republicans insist they have already cut funding in the 2025 “One Big Beautiful Bill Act,” and further concessions would harm border security; however, Democrats believe that unless law enforcement authority is fundamentally reclaimed, reforms are just on paper.

Time is running out. If the Senate does not pass any form of temporary spending resolution before the 30th, the Trump administration will face its second shutdown since taking office. Negotiations in Washington are ongoing, but in the tense political atmosphere of early 2026, any compromise seems difficult.

Latest market forecast data

Currently, according to Polymarket data, the market bets an 80% chance that the US government will shut down again on January 31.

Although the immediate impact of non-core department closures on GDP is limited, prolonged delays could postpone government contracts and federal employee salaries, potentially weakening business and consumer confidence. During the last shutdown, risk assets experienced increased short-term volatility. Investors should be cautious.