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The federal government is headed into a shutdown. What does it mean, who’s hit and what’s next?

by Ethan Kim
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Government Shutdown Consequences

The federal government is on the verge of a shutdown, raising concerns about its consequences on services, employees, and the political landscape. This impending shutdown stems from the House Republicans’ insistence on deep budget cuts, sparking a showdown over federal spending. While certain critical functions will continue, including Social Security payments, numerous non-essential activities will be significantly curtailed. This will result in federal agencies halting non-essential operations, with millions of federal workers, including military personnel, facing delayed paychecks.

A government shutdown occurs when Congress fails to pass legislation for funding that the President can sign into law. Typically, lawmakers need to approve 12 separate spending bills to finance various government agencies, a time-consuming process. When this doesn’t happen, they resort to passing a temporary extension known as a continuing resolution (CR) to keep the government operational. However, in the absence of funding legislation, federal agencies must cease non-essential work and withhold paychecks during the shutdown. Fortunately, a 2019 law guarantees backpay to affected workers once the funding deadlock is resolved.

The looming shutdown is set for October 1, coinciding with the start of the federal budget year. The duration of this shutdown is unpredictable, given the divided Congress between a Democratic-controlled Senate and a Republican-led House. With hard-right conservatives in the House eager to leverage the shutdown for spending cuts, there’s a significant possibility that it could last for weeks.

The impact of a shutdown extends beyond federal employees, affecting millions of military personnel and civilian workers across the nation. Nearly 60% of federal workers are concentrated in the Department of Defense, Veterans Affairs, and Homeland Security, directly interacting with taxpayers in various capacities. Moreover, government services, such as clinical trials, firearm permits, and passport applications, could experience delays. Businesses linked to the federal government, including contractors and tourist services near national parks, may suffer disruptions and downturns. The travel sector, for instance, stands to lose $140 million daily during a shutdown. Additionally, financial markets could be rattled, potentially reducing economic growth temporarily.

As for court cases and government officials, the President and members of Congress will continue to work and receive their salaries. However, non-essential staff members will face furloughs. The judiciary can function for a limited period using funds from court fees and other approved sources. Notably, the funding for special counsels, including those overseeing cases involving former President Donald Trump and Hunter Biden, remains unaffected by a government shutdown.

Historically, government shutdowns have become more common since the era of Bill Clinton, often spurred by budget disputes. The longest shutdown occurred between 2018 and 2019 during President Trump’s administration, lasting 35 days but affecting only certain government functions due to partial appropriations.

Ending a shutdown is the responsibility of Congress, which must agree on funding measures and secure the President’s approval. Congress often relies on continuing resolutions for temporary funding while budget negotiations continue. However, some hardline Republicans oppose any short-term funding bills, insisting on resolving all 12 government funding bills before reopening. This stance, endorsed by former President Trump, could prolong the shutdown for weeks or even longer, with potential far-reaching consequences.

In conclusion, the impending federal government shutdown carries significant implications for both federal workers and the broader economy, underscoring the need for bipartisan solutions to resolve budget disputes and prevent disruptions to essential government services.

Frequently Asked Questions (FAQs) about Government Shutdown Consequences

What is a government shutdown?

A government shutdown occurs when Congress fails to pass funding legislation that the President can sign into law. This leads to the cessation of non-essential federal operations and a withholding of paychecks for federal employees until the funding issue is resolved.

When does a government shutdown begin, and how long can it last?

A government shutdown is triggered when government funding expires, typically at the start of the federal budget year on October 1. The duration of a shutdown is unpredictable, with the potential to last for weeks or longer, depending on the political climate and budget negotiations in Congress.

Who does a government shutdown affect?

A government shutdown affects millions of federal workers, including military personnel and civilian employees, who may face delayed paychecks. It also impacts government services, causing delays for citizens applying for services such as clinical trials, firearm permits, and passports. Businesses connected to the federal government, like contractors and tourist services near national parks, can experience disruptions and economic downturns.

How does a government shutdown affect the economy?

A government shutdown can rattle financial markets, potentially reducing economic growth temporarily. Estimates suggest that it could result in a 0.2% weekly reduction in economic growth. However, economic growth tends to rebound once the government reopens.

What is the role of Congress in ending a shutdown?

Congress is responsible for funding the government. To end a shutdown, both the House and Senate must agree on funding measures, and the President must sign the legislation into law. Congress often relies on continuing resolutions for temporary funding while budget negotiations continue.

Has the United States experienced government shutdowns in the past?

Yes, government shutdowns have occurred periodically since 1976, with 22 funding gaps and 10 resulting in worker furloughs. Most significant shutdowns have happened since Bill Clinton’s presidency, often driven by budget disputes and political disagreements.

What can be done to prevent government shutdowns in the future?

Preventing government shutdowns requires bipartisan cooperation in Congress to pass budget legislation in a timely manner. This may involve compromise and negotiation to avoid disruptions to essential government services and the broader economy.

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