The Economist explains
What happens when America’s government shuts down?
For starters, millions of people do not get paid
ON SEPTEMBER 23RD, a spokesman for America’s Office of Management and Budget—the federal agency charged with implementing executive-branch policy—said that while he “fully expect[s] Congress to work in a bipartisan fashion to keep our government open…prudent management requires that the government prepare for a lapse in funding.” Notwithstanding the rosiness of his expectations, he’s not wrong about the prudence. America’s federal fiscal year begins on October 1st. By September 29th, Congress had not appropriated funding to keep the government running. If that remains true after 11.59pm on September 30th, the federal government will shut down—for the fourth time in the past eight years. What exactly does that mean? What happens when America’s government shuts down?
Some parts of it will keep running. Hospitals run by the Veterans’ Affairs Department, which provide care for millions of people, remain open. Mail gets delivered; the Post Office is funded by revenue from stamps and services rather than through appropriated tax dollars. Law-enforcement officers, members of the armed forces, air-traffic controllers and Transportation Security Administration employees who screen passengers at airports all keep working. But, like federal workers who get “furloughed” (ie, told not to come into work), they do not get paid. After the previous shutdown, which began on December 22nd 2018 and lasted for 35 days, Congress passed a law guaranteeing back pay for furloughed workers—who then amounted to 800,000 of the 2.1m non-postal federal workforce—but extended shutdowns will still strain federal workers’ pocketbooks.
Some parts of government function at reduced levels. People who rely on social-security and Medicare should still receive cheques, for example, although new applicants may need to wait to enroll and payments could be delayed. But other federal functions stop, either immediately or eventually, as agencies exhaust any stored funding. In previous shutdowns, the Environmental Protection Agency halted inspections of chemical facilities and drinking-water providers, as well as of sites that handle hazardous waste. The Food and Drug Administration may stop inspecting slaughterhouses and other food-production sites. States have had to front payments for welfare programmes. A long shutdown may halt food-stamp payments, increasing the risk of hunger among poor families. National parks may remain open, but with sharply limited services. Immigration courts, already strained, may struggle to function; people may be unable to take out home or business loans that require federal approval.
The longer a shutdown lasts, the greater the risk of unexpected potential consequences, such as fatal accidents caused by unrepaired bridges or highways, or illness suffered because of crucial research left unfunded. Opportunities may be missed as well: a successful business may never get off the ground because the Small Business Administration could not process loans. These possibilities, of course, come on top of the financial stress that millions of families of federal workers will suffer. And shutdowns carry broad economic costs: the Congressional Budget Office estimates that the 2018-19 shutdown dented America’s fourth-quarter GDP by $3bn. The shutdown now looming could be particularly damaging. In 2018, Congress had already enacted five of the 12 appropriations bills needed to keep the government running. So far this year, it has passed none.
More from The Economist explains:
What is America’s debt ceiling?
Why are British petrol stations running dry?
Why are conservatorships controversial?