![\"The](\"http:\/\/fm.cnbc.com\/applications\/cnbc.com\/resources\/img\/editorial\/2013\/10\/08\/101096372-183632423.530x298.jpg?v=1504102093\")
<\/a><\/p>\nSaul Loeb | AFP | Getty Images \u00a0– \u00a0The US Capitol<\/h5>\n<\/div>\n\nGoldman Sachs said Hurricane Harvey will have significant political implications for Congress later this year.<\/p>\n
The firm said the catastrophic storm would reduce the probability of a federal government shutdown to 35 percent, from its previous forecast of 50 percent just\u00a0weeks<\/a>\u00a0ago. Goldman cited the political risks from failing to fund Texas relief efforts.<\/p>\n“Recent events have lowered the odds of a government shutdown or a delayed debt ceiling hike but have also increased the number of possible scenarios, complicating the legislative outlook over the next couple of months,” Goldman economist Alec Phillips wrote in a note to clients Tuesday.<\/p>\n
“The main issue is Hurricane Harvey. Allowing a partial government shutdown when federal relief efforts are underway would pose greater political risks than under normal circumstances, raising the probability that lawmakers will find a way to resolve disagreements,” he added.<\/p>\n
Congress will take up two issues in September: raising the debt ceiling, which is the legislative limit on how much the government can borrow, and passing a spending bill. The U.S. Treasury has said Congress needs to raise the debt ceiling by Sept. 29. Failure to pass a spending bill could force a government shutdown.<\/p>\n
Phillips explained that the Federal Emergency Management Agency will soon require more funding for its Hurricane Harvey relief efforts.<\/p>\n
“Congressional leaders are apt to combine this with legislation to extend federal spending authority and\/or raise the debt limit if possible. If they do, a combined package would be more likely to pass and less likely to be vetoed, in our view,” he wrote.<\/p>\n
The economist did couch his new prediction, saying President\u00a0Donald Trump<\/a>\u00a0could still force a shutdown over the border wall funding issue.<\/p>\n“That said, a shutdown or delayed debt ceiling hike is still clearly possible. The President continues to raise the possibility of a shutdown if the border wall is not funded, and the upcoming extension of spending authority is likely to be temporary, potentially pushing the risk of a shutdown later into the year,” he wrote.<\/p>\n
Goldman Sachs said Hurricane Harvey will have significant political implications for Congress later this year.<\/p>\n
The firm said the catastrophic storm would reduce the probability of a federal government shutdown to 35 percent, from its previous forecast of 50 percent just\u00a0weeks<\/a>\u00a0ago. Goldman cited the political risks from failing to fund Texas relief efforts.<\/p>\n “Recent events have lowered the odds of a government shutdown or a delayed debt ceiling hike but have also increased the number of possible scenarios, complicating the legislative outlook over the next couple of months,” Goldman economist Alec Phillips wrote in a note to clients Tuesday.<\/p>\n “The main issue is Hurricane Harvey. Allowing a partial government shutdown when federal relief efforts are underway would pose greater political risks than under normal circumstances, raising the probability that lawmakers will find a way to resolve disagreements,” he added.<\/p>\n Congress will take up two issues in September: raising the debt ceiling, which is the legislative limit on how much the government can borrow, and passing a spending bill. The U.S. Treasury has said Congress needs to raise the debt ceiling by Sept. 29. Failure to pass a spending bill could force a government shutdown.<\/p>\n Phillips explained that the Federal Emergency Management Agency will soon require more funding for its Hurricane Harvey relief efforts.<\/p>\n “Congressional leaders are apt to combine this with legislation to extend federal spending authority and\/or raise the debt limit if possible. If they do, a combined package would be more likely to pass and less likely to be vetoed, in our view,” he wrote.<\/p>\n The economist did couch his new prediction, saying President\u00a0Donald Trump<\/a>\u00a0could still force a shutdown over the border wall funding issue.<\/p>\n “That said, a shutdown or delayed debt ceiling hike is still clearly possible. The President continues to raise the possibility of a shutdown if the border wall is not funded, and the upcoming extension of spending authority is likely to be temporary, potentially pushing the risk of a shutdown later into the year,” he wrote.<\/p>\n