US Government Prepares for Partial Shutdown
The Capitol building, Washington D.C., U.S., 2024. X/ @fireman3099
December 20, 2024 Hour: 8:44 am
Since 1976, the U.S. government has run out of funds about 20 times, though most shutdowns have lasted only a day.
The United States is once again facing the possibility of a partial government shutdown starting at midnight on Friday and lasting through Saturday if Congress does not reach an agreement to extend funding before then.
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This could freeze the salaries of thousands of federal employees, reduce public services and cast a pall over the final stretch of Democratic President Joe Biden’s term, which ends on January 20.
What triggers a government shutdown?
The government can only spend money allocated by Congress. If the House of Representatives and the Senate fail to reach an agreement on the budget law before the current one expires, and no short-term funds are approved to close the funding gap, federal agencies are forced to shut down.
What is the impact?
The temporary suspension of funding for non-essential activities does not affect all agencies equally. Each agency has its own plans for determining how many employees will be furloughed, which workers are deemed essential and will work without pay, and which activities will be halted.
In practice, hundreds of thousands of federal workers would be furloughed, while hundreds of thousands more, including those ensuring transportation security, would have to continue working. None of these employees would be paid during the shutdown, but most are compensated retroactively once the government reopens.
Previous shutdowns have resulted in the closure of museums and national parks, the suspension of food safety inspections, and interruptions to scientific research programs. However, payments for Social Security, for instance, are not affected.
How many government shutdowns have occurred?
Since 1976, when new budget laws were enacted, the U.S. government has run out of funds about 20 times, though most shutdowns have lasted only a day.
The longest shutdown, lasting 35 days, occurred during Donald Trump’s first term (2017–2021), just before Christmas in 2018, due to disagreements between Democrats and Republicans over funding for the border wall Trump wanted to build along the U.S.-Mexico border.
The second longest, lasting 21 days, also occurred in December, but in 1995, during Democrat Bill Clinton’s administration (1993–2001). Some shutdowns were so brief—just a few hours, overnight, or over a weekend—that federal agencies did not fully close during the “impasse.”
Do shutdowns have an economic cost?
The financial impact of a shutdown can run into billions of dollars. The funding lapse triggered by Trump’s proposed border wall reduced U.S. GDP by US$11 billion, according to the Congressional Budget Office. Of that amount, US$3 billion was never recovered.
Businesses may also face challenges in obtaining federal permit approvals, potentially affecting their investment and hiring decisions. In the case of a prolonged shutdown, such as the one during Trump’s tenure, federal employees might cut back on spending, impacting local economies. The private sector could also suffer if the Small Business Administration is unable to approve loans.
What has caused the current disagreement?
On Tuesday, the Republican-controlled House of Representatives and the Democratic-controlled Senate reached a bipartisan agreement to provide new funding for the government. However, that deal was overturned on Wednesday following opposition from Trump to certain resolutions.
Republicans presented a new unilateral proposal that included eliminating the debt ceiling for two years. However, during Thursday’s vote, they failed to push it through, partly due to internal dissent.
If the House of Representatives manages to approve a proposal on Friday, it must still go through the Senate, where Democrats hold the majority. A non-bipartisan proposal would face significant challenges in succeeding.
teleSUR/ JF Source: EFE
