Federal Government Nears Shutdown, Threatening Services and Workers’ Paychecks
The federal government is on the verge of a shutdown that could disrupt vital services, impact workers, and create political turmoil. Republican lawmakers in the House, driven by staunch demands for substantial budget cuts, are forcing a confrontation over federal spending.
A government shutdown occurs when Congress fails to pass funding legislation that is then signed into law by the president. In the absence of such legislation, federal agencies are obligated to halt all non-essential operations and withhold paychecks until the shutdown is resolved.
While certain government entities, like Social Security, will be exempt from the shutdown, many functions will be significantly curtailed. Federal agencies will cease all actions deemed non-essential, and millions of federal employees, including military personnel, will not receive their pay.
The shutdown, scheduled to begin on October 1, is initiated when Congress cannot pass a funding plan that garners the president’s approval. The duration of a shutdown is difficult to predict, but with a divided Congress and hardline conservatives led by Speaker Kevin McCarthy aiming to leverage the shutdown for spending cuts, it could potentially last weeks.
Millions of federal workers, including over two million military personnel and civilians nationwide, face delayed paychecks due to the shutdown. The Defense, Veterans Affairs, and Homeland Security departments, where nearly 60% of federal workers are stationed, will particularly feel the impact.
The repercussions of a shutdown extend beyond federal workers. Government services such as clinical trials, firearm permits, and passport applications could face delays. Businesses connected to the federal government, like contractors and tourist services near national parks, may experience disruptions and economic downturns. The travel sector alone could lose $140 million daily during a shutdown.
Financial markets may also be adversely affected by a shutdown, potentially causing instability. Goldman Sachs estimates that economic growth could decrease by 0.2% each week of the shutdown, with subsequent recovery upon government reopening.
Furthermore, the disruption in government services erodes confidence in its ability to fulfill essential responsibilities. The U.S. Chamber of Commerce warns that “a well-functioning economy requires a functioning government.”
While the president and members of Congress will continue to work and receive payment during a shutdown, non-essential staff members may be furloughed. The judiciary, operating with funds derived from court fees and other approved sources, will be able to continue functioning for a limited time.
Notably, the shutdown would not affect the funding of three special counsels appointed by Attorney General Merrick Garland, as they are financed through a permanent appropriation that is exempt from shutdowns. This means ongoing cases involving former President Donald Trump and the son of President Joe Biden, Hunter Biden, would not be interrupted.
Government shutdowns became more significant after a series of legal opinions in the 1980s, establishing that agencies cannot legally operate during funding gaps. Since then, government officials have been allowed to make exemptions for functions deemed essential to public safety and constitutional duties.
There have been 22 funding gaps since 1976, with 10 resulting in worker furloughs. The most prolonged shutdown, lasting 35 days from 2018 to 2019, occurred when then-President Trump clashed with congressional Democrats over funding for a border wall. However, that shutdown was only partial as some appropriations bills had already been passed.
Ultimately, it is the responsibility of Congress to fund the government. The House and Senate must agree on a funding plan, which then needs the president’s approval. Congress often relies on continuing resolutions (CR) to temporarily fund the government while budget negotiations take place. However, hardline Republicans are refusing to accept any temporary bill and are pushing for all 12 government funding bills to be resolved before reopening, a process that historically takes months.
Former President Trump, who is positioning himself as President Biden’s primary opponent in the 2024 election, is encouraging these hardline Republicans. If they succeed, the shutdown could persist for weeks or even longer.