Government shutdown: What does it mean, who’s hit, and what’s next?

By James On Sep 27, 2023

The federal government is heading for a shutdown that will disrupt many services, put pressure on workers and roil politics, while Republicans in the House of Representatives, fueled by hard-right demands for deep cuts, will stage a showdown over federal spending enforce.

While some government agencies will be exempt – for example, social security checks will still be carried out – other functions will be severely curtailed. Federal agencies will halt all actions deemed non-essential, and millions of federal employees, including members of the military, will not receive paychecks.

A look at what awaits us when the government closes its doors on October 1.

What is a government shutdown?

A shutdown occurs when Congress fails to pass some form of funding legislation signed into law by the president. Lawmakers would have to pass 12 different spending bills to fund agencies across the government, but the process is time-consuming. They often resort to a temporary extension, called a continuing resolution or CR, to allow the government to continue functioning.

If funding legislation is not passed, federal agencies must halt all non-essential work and will not send paychecks while the shutdown lasts.

While workers deemed essential, such as air traffic controllers and law enforcement, are still required to report to work, other federal employees are being laid off. Under a 2019 law, those same workers will receive back wages once the funding impasse is resolved.

When would a shutdown start and how long will it last?

Government funding expires on October 1, the start of the federal budget year. A shutdown will effectively begin at 12:01 a.m. if Congress fails to pass a funding plan that the president signs into law.

It is impossible to predict how long a shutdown will last. With Congress divided between a Democratic-controlled Senate and a Republican-led House, and Speaker Kevin McCarthy’s far-right conservatives looking to use the shutdown as leverage for spending cuts, many are preparing for a strike that could last weeks.

Who does a shutdown apply to?

Millions of federal workers face delayed payroll payments if the government shuts down, including many of the roughly 2 million military personnel and more than 2 million civilian workers across the country.

Nearly 60% of federal employees are stationed in the Departments of Defense, Veterans Affairs and Homeland Security.

Federal employees are stationed in all fifty states and interact directly with taxpayers – from Transportation Security Administration agents who provide security at airports to Postal Service workers who deliver mail.

Some federal offices will also have to close or experience reduced hours during a shutdown.

In addition to federal employees, a shutdown could have far-reaching consequences for government services. People applying for government services such as clinical trials, firearms licenses and passports could experience delays.

Businesses closely tied to the federal government, such as federal contractors or tourism services around national parks, may experience disruptions and declines. According to the United States Travel Industry Association, the travel industry could lose $140 million a day in the event of a shutdown.

Lawmakers also warn that a shutdown could throw financial markets into turmoil. Goldman Sachs has estimated that a shutdown would reduce economic growth by 0.2% each week, but that growth would then recover after the government reopens.

Others say the disruption of government services has far-reaching consequences, damaging trust in the government to fulfill its basic functions. The U.S. Chamber of Commerce warned: “A functioning economy requires a functioning government.”

What about lawsuits, the work of Congress, and the president’s pay?

The president and members of Congress will continue to work and get paid. However, all members of their staff who are not considered essential will be laid off.

The judiciary will be able to continue to function for a limited time using funds derived from court files and other reimbursements, as well as other approved financing.

Notably, funding for the three special counsels appointed by Attorney General Merrick Garland would not be affected by a government shutdown because they are paid through a permanent, indefinite appropriation, an area that has been exempt from shutdowns in the past .

That means the two federal cases against Donald Trump, the former president, and the case against Hunter Biden, President Joe Biden’s son, would not be paused. Mr Trump has demanded that Republicans halt prosecutions against him as a condition of funding the government, calling it their “last chance” to act.

Has this happened before?

Before the 1980s, shortfalls in government funding did not result in significant cessation of government activities. But then-U.S. Attorney General Benjamin Civiletti argued in a series of legal opinions in 1980 and 1981 that government agencies cannot legally operate during a funding shortfall.

Federal officials have since operated under the understanding that they can make exceptions for functions that are “essential” to public safety and constitutional duties.

Since 1976, there have been 22 funding shortfalls, 10 of which resulted in employee layoffs. But most major shutdowns have occurred since Bill Clinton’s presidency, when then-Speaker Newt Gingrich and his conservative majority in the House of Representatives demanded budget cuts.

The longest government shutdown occurred between 2018 and 2019, when then-President Trump and Democrats in Congress reached an impasse over his demand for funding for a border wall. The disruption lasted 35 days, over the holiday season, but was also only a partial government shutdown, as Congress had passed a number of appropriations bills to fund parts of the government.

What does it take to end a shutdown?

It is Congress’s responsibility to fund the government. The House and Senate must agree to fund the government somehow, and the president must sign the legislation into law.

Congress often relies on a so-called continuing resolution, or CR, to provide emergency funding to open government offices at current levels while budget discussions are underway. Money for achieving national priorities, such as emergency aid for victims of natural disasters, is often linked to a short-term law.

But hardline Republicans say any temporary bill is a non-starter for them. They aim to keep the government shut down until Congress has negotiated all 12 bills that fund the government, which has historically been a difficult endeavor that won’t be resolved until December at the earliest.