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Capital Markets Update Week of 3/4

March 4, 2025

The Department of Homeland Security (DHS) shutdown is nearing the one month mark with little progress made on re-opening the department.

Why it matters: The DHS funding lapse began February 14 amid Democratic pushback on Immigration and Customs Enforcement (ICE) funding. The bill is the last remaining piece of FY 2026 government appropriations.

On Sunday, Senator Tim Kaine (D-VA) stated that he would like to fund some parts of DHS, but not all.

"Let’s just pass those funding bills. Let’s confine the ICE and CBP reform discussion just to those two agencies and fund the others. Thus far, Republicans have blocked those efforts. We want to fund TSA, FEMA, Coast Guard and CISA,” Kaine said during an appearance on CBS’s “Face the Nation.”

Source: The Hill

Yes, but: The partial funding of the department is likely to be a non-starter. A funding bill of this nature failed in the Senate just last week.

Over the past three weeks, Democratic leadership and the White House have traded reform demands back and forth but have yet to find a compromise. It remains to be seen if a deal to fund everything excluding ICE and CBP is a viable path forward.

• Amid the shutdown of the Department, the Secretary of Homeland Security, Kristi Noem was fired by President Trump on March 5. 
• The final straw was reportedly the spending of $220 million on an ad campaign that prominently featured Sec. Noem. 
• Noem, stated in her testimony to the Senate Judiciary Committee that this ad campaign was approved by President Trump himself. Following her testimony, Trump denied approving the campaign and announced shortly thereafter that Noem would no longer lead the department.
• Trump then announced that Sen. Markwayne Mullin (R-OK) will take over the department effective March 31. A change in leadership could help bolster the agencies credibility, but a deal on funding the department still seems distant.

The bottom line: Essential DHS employees continue working without pay, while key programs are seeing disruption. We will continue to track developments and share updates.

Contact James Montfort (jmontfort@crefc.org) with any questions.

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