Your questions answered on another possible US government shutdown
THE US government is fast approaching yet another shutdown unless Congress enacts a temporary spending bill before the new fiscal year starts on Oct 1.
With the Democratic-led Senate and Republican-led House still far apart on the outlines of such a stopgap spending measure, discussion is shifting from whether a shutdown will happen to how long it might last.
Memories remain fresh of the longest shutdown in US history, lasting 35 days in late 2018 into early 2019, over President Donald Trump’s insistence on US$5.7 billion for a wall on the border with Mexico.
1. Why does the government shut down?
The US government runs on 12 appropriations bills passed each year by Congress and signed by the president. In fiscal years like this one, when all 12 bills aren’t adopted by the Oct 1 start of the fiscal year – the current count is zero, for those keeping score – Congress and the president keep the machinery of government humming by passing short-term extensions of current funding, known formally as continuing resolutions (CR). If they can’t agree to a CR, the US government has what’s called a funding gap and federal agencies may need to take steps to shut down.
2. How many times has this happened?
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There have been 14 shutdowns since 1981, ranging in duration from a single day to the 35-day shutdown in 2018-2019. Before 1981, agencies operated mostly as normal during funding gaps, their expenses covered retroactively once a deal was reached.
Shutdowns over spending disagreements are different (and less grave) than what would happen if the US breached its debt ceiling and defaulted on some of its obligations. That’s never happened, but the US came close earlier this year.
3. What does a shutdown mean?
It means many, though not all, federal government functions are suspended, and many, though not all, federal employees are furloughed. Services that the government deems “essential,” such as those related to law enforcement and public safety, continue. These essential employees work without pay until the shutdown ends.
4. Which workers are ‘essential’?
Defining that is more art than science. Individual government departments – and the political appointees who run them – have a say over who comes to work and who stays home. In theory at least, a federal employee who works during a shutdown, but isn’t supposed to, could face fines or a prison term under what’s called the Antideficiency Act.
5. What government services cease in a shutdown?
The ones that draw headlines are those that produce closures of national park facilities and the Smithsonian museums in Washington and delays in processing applications for passports and visas.
Oversight of financial swap markets and investigations of workplace civil-rights complaints are among activities expected to stop. Economic reports from the Labor and Commerce departments could be delayed, depending on how long a shutdown lasts.
For a time it seemed that the Internal Revenue Service might be able to stay open, thanks to funding it received in the Inflation Reduction Act to help the agency modernize.
But the Treasury Department said on Thursday (Jan 11) that most core tax functions will pause in the event of a government shutdown, meaning that taxpayer phone calls will go unanswered and refunds will not be processed for returns that weren’t e-filed.
6. Which government functions would be unaffected?
Military operations, air traffic control, medical care of veterans and federal criminal investigations are among the essential activities that go on. In the 2019 shutdown, air traffic controllers working without pay for a month threatened to walk off the job – a development that hastened the end of the shutdown.
The US Postal Service and Federal Reserve have their own funding streams so are largely unaffected.
7. What would happen to federal contracts?
Private companies that rely on federal contract work – ranging from Elon Musk’s SpaceX to janitorial service providers for local federal buildings – are bracing for up to US$1.9 billion a day in lost and delayed revenue. Service contract employees historically have been furloughed during shutdowns and haven’t received back pay when the government resumes operations.
8. What happens to government checks?
Entitlement programs such as Social Security and Medicare are considered mandatory spending, meaning they don’t need annual appropriations to continue distributing money.
That doesn’t mean such programs are guaranteed to be unaffected. During a 1996 shutdown, even as Social Security checks continued to go out, “staff who handled new enrollments and other services, such as changing addresses or handling requests for new Social Security cards, were initially furloughed,” according to the Committee for a Responsible Federal Budget. And during the 2018-2019 shutdown, the Department of Agriculture had to rely on a special authority included in the previous continuing resolution to continue issuing food stamps. BLOOMBERG
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