Large portions of the federal government may be forced to shut down on October 1 if Congress fails to pass spending measures owing to a disagreement between far-right Republicans and other politicians.
Here are some facts concerning government shutdowns in the United States:
Why would the government shut down?
Each fiscal year, which ends on September 30, Congress must appropriate funds to 438 government agencies. If Congress does not adopt those bills by the start of the new fiscal year, those agencies will be unable to function normally.
According to the Congressional Research Service, there have been 20 government shutdowns since the 1970s. The most recent one also had the longest duration, lasting 35 days between December 2018 and January 2019 owing to a border security issue.
Lawmakers frequently postpone that deadline by prolonging agencies’ present budget levels in a “continuing resolution” to allow them to continue negotiating.
What are the ramifications?
Hundreds of thousands of federal employees would be furloughed without pay, and a vast range of services, from passport applications to trash pickup at national parks, would be interrupted.
Other staff deemed “essential” would continue to work but would not be paid. Mail delivery, tax collection, and U.S. debt payments would all continue.
Short-term shutdowns would have little practical impact, especially if they occurred on a weekend, but the larger economy may suffer if federal employees began missing paychecks after two weeks.
According to Goldman Sachs, a shutdown would cut GDP growth by roughly 0.15 percentage points for each week it lasted, but growth would increase by the same amount once the closure was concluded.
According to the Congressional Budget Office, the 2018-2019 government closure cost the economy around $3 billion, or 0.02% of GDP.
What are the ‘essential’ functions?
Each department and agency has a plan in place to determine whether staff must continue to work without compensation.
Approximately 800,000 of the federal government’s 2.2 million employees were furloughed during the 2018-2019 shutdown. The White House budget office did not specify how many people would be affected this time.
The Department of Homeland Security announced that 227,000 of its 253,000 employees, including border security agents and the Coast Guard.
In its 2021 contingency plan, the Department of Justice stated that 85% of its 116,000 employees, including prison staff and prosecutors, would be considered critical. Criminal proceedings would continue, but most civil cases would be put on hold.
Air travel would be generally unaffected, but the Transportation Security Administration has previously cautioned that airport security screeners may call in sick at a higher rate during shutdowns.
It is unclear whether the 63 national parks in the United States will remain open. During the 2013 government shutdown, the Obama administration closed parks owing to safety concerns, costing an estimated $500 million. During the 2018-19 shutdown, the Trump administration kept them open while closing public bathrooms and information desks and suspending waste disposal. Some states, for example, New York and Utah, paid for their sites to stay open and staffed during the 2018-2019 shutdown.
The Internal Revenue Service has previously furloughed up to 90% of its personnel, but under its current contingency plan, 100% of its employees are considered essential.
While all military personnel would continue to work, around 429,000 civilian Pentagon employees would be furloughed.
What distinguishes this from a debt ceiling standoff?
A government shutdown occurs when Congress fails to appropriate more funds to the United States government’s budget.
A debt ceiling is a cap set by Congress on how much money the United States government can borrow, which must be raised on a regular basis.
Failure to do so may prohibit the United States Treasury from paying its bills. Unlike a government shutdown, a US debt default would almost certainly have serious consequences, upsetting global financial markets and plunging the country into recession.
Sometimes Congress raises the debt ceiling quietly, and other times, as in June, lawmakers use the occasion to engage in a raucous debate about fiscal policy before increasing the cap at the last possible moment.
