This morning we are discussing the government shutdown. First, how did we get here?
Congress is responsible for passing budgets that authorize funding for the government. In recent years, these have often been short-term, meaning multiple new bills have been required. The bill authorizing current spending expired on Friday. However, given Republican control of the White House and both chambers of commerce since this time a year ago, this is an unexpected development.
And yet, the first year of this administration has shown that we are in a new political dynamic. It is not uncommon for the White House to oppose its own party initiatives in Congress. Congressional Republicans are divided about priorities.
The Democrats in Congress are holding their ground too, insisting that the budget bill include protections for dreamers, in the wake of President Trump scrapping President Obama’s executive order.
One factor that did make this impasse more likely is that it is not driven by the need to raise the debt ceiling, or the limit that the government can borrow. This shutdown is the result of congress not passing a budget. In march or april, the debt ceiling for the us government will expire. If an impasse arises then, the impacts of that shutdown would be much bigger.
Who will be affected most immediately?
The most immediate impact will be on government employees. Thousands of federal employees were furloughed during the 2013 government shutdown — meaning they did not report to work. If the impasse continues in D.C., government workers for agencies and departments that are considered nonessential, will not report to work until Congress is able agrees on a bill for the federal budget.
Among those departments and agencies that will be impacted most are the departments of Housing and Urban Development, Commerce, Education, Interior, and Labor, and the Environmental Protection Agency. At the peak of the 2013 government shutdown, about 850,000 employees were furloughed per day. In the past, workers who were affected by furloughs were paid retroactively. The military is considered essential and will still report for duty. However, the troops – including those currently in combat zones – may not be paid during a shutdown.
How will everyday Americans be impacted?
There are a number of ways Americans will feel the effects of the federal government closing. During the 2013 shutdown, tens of thousands of small businesses who were awaiting loans from the Small Business Administration were left in limbo without access to funds. Those who had submitted an application for a passport or a request for a passport renewal were affected. And national parks and museums were shuttered.
The uncertainty of the shutdown may also ruffle the feather of the markets, depending on how long it lasts. The 2013 shutdown had a slight negative impact on the U.S. economy, with growth slowing slightly during the quarter the government closed. If this shutdown does continue, we are likely to see similar ripple effects.
What about those who rely on the government, like the elderly and veterans?
Essential services – those that protect “human life or property,” in addition to those that have alternative funding streams outside the appropriations process, will continue to function. So, in the case of Social Security, recipients will continue to receive their checks.
Veterans will continue to receive care, though there may be some hiccups. The air traffic control and transportation security administrations will continue to monitor our air traffic and airports, and because it has its own funding streams, the U.S. Postal Service will continue delivering mail. However, it is worth noting that none of these actions would necessarily continue in a shutdown over the debt ceiling.
What can we expect going forward? How will this play out?
Both sides are engaged in negotiations, and analysts are expecting the sides to come to an agreement sooner rather than later. However, no one knows how long that will take, or what the final deal will look like. Many expect this will be resolved by a short-term funding extension that will allow the sides to continue their deal making efforts while keeping the federal government open. Stay tuned!
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