The US Capitol in Washington, DC.
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The looming government shutdown could leave hundreds of thousands of federal employees unpaid and place key economic data, including the Bureau of Labor Statistics employment reports, which are closely monitored on the ice.
Congress has only four days left to agree to the StopGup bill last Tuesday to fully fund the federal government.
But once the clock is finished, Republican and Democrat leaders are digging into each other’s heels, making it even more possible to close.
Republicans who hold a narrow majority in the House and Senate want to pass “clean” resolutions to temporarily expand their funds.
Democrats hope stops include medical protection, including an extension of the enhanced premium tax credit under the Affordable Care Act, which expires at the end of the year. Credit reduces the cost of health insurance premiums for Obamacare enrollees on the wider strip.
The funding bill requires 60 votes to be adopted by the Senate. That is, if only 53 Republicans from that chamber voted for it, it cannot be passed.
President Donald Trump ratcheted the political brink this week by canceling a scheduled meeting with Senate minority leader Chuck Schumer and House minority leader Hakem Jeffries.
Trump’s administration issued a memo on Wednesday raising more human interests and warning federal agencies to prepare for mass shootings if it is closed.
Each side bets that Americans will blame others for the closure. However, regardless of political dividends, shutdowns have a major impact on a wide range of services and programs.
And that could lead to unprecedented actions by the Trump administration, which made the government a top priority.
What is a government closure?
Congress must pass a series of 12 spending bills by Tuesday to fund government agencies for the upcoming fiscal year. However, none of the 12 invoices passed prior to that deadline.
If short-term funding measures known as “continuous resolution” cannot be passed, the government will be shut down.
According to the bipartisan policy center, since 1980, there have been 14 such closures.
If Congress can pass some, but not all, of the annual budget bill in time, within the period, the government will experience a partial closure.
It happened in late 2018 (during Trump’s first presidential term), when the government was partially shut down for a five-week record amid a dispute over Trump’s US-Mexico border wall funding.
How are federal employees affected?
Non-essential government employees could be broken during the closure. This means they are forced to take unpaid leave.
Around 850,000 employees were filled during the last full government shutdown in 2013, according to the Responsible Federal Budget Committee.
There are over 2 million private workers in the US
According to the CRFB, Furloughed employees are guaranteed wages when they return to work, but federal contractors have historically not received wages.
Which services and agents are affected?
Closures directly affect non-essential government programs and services that rely on expenditures that must be allocated annually, known as discretionary expenditures.
Past closures have led to the closure of hundreds of national parks and museums, reduced veteran services, suspended health checks, postponed immigration hearings and many more.
According to the Peter G. Peterson Foundation, discretionary spending accounts for 27% of the 2024 budget.
Services and programs that are deemed mandatory will continue to work, but may be indirectly affected. Additionally, some federal employees are classified as “exceptions.” This means you need to work during the closure.
Examples of key services include those related to national security, law enforcement, air traffic control and prison prison control.
Programs funded through “essential” expenditures permitted for a permanent or multi-year period can be felt as if the closure is impacted, but will continue widely.
With the 1996 closure, Social Security checks were still being sent. However, Social Security Bureau staff, which processed new registrations for the program and other services, were initially removed.
What about the economic report?
The closure could delay the release of major economic reports that are regularly issued by the government, which is closely monitored by financial markets.
If the transaction is not reached, the government will close a few days before the Bureau of Labor Statistics is set to issue monthly employment reports in September.
Wells Fargo economist Michael Puglise said this week that monthly employment and consumer price index reports were “around two weeks behind” after the last full government shutdown in 2013.
“The delays in collection, processing and publications also increased the following month,” Puglise noted.
The next BLS employment report is scheduled to be released on October 3rd. The September BLS consumer price index read is scheduled to be released on October 15th.
The partial closure that began in late 2018 saw an initial view of “gross domestic product growth for the fourth quarter of that year” by about a month, and as well as data on retail sales and personal income and spending in December 2018, it was delayed by about a month.”
– CNBC’s Emily Wilkins contributed to this story.
