On October 25, 2023, in Washington, D.C., U.S. Speaker of the House Mike Johnson, R-La., makes a speech among other Republicans on the House of Representatives’ East Front steps. (Getty Images/Chip Somodevilla).
The deadline for politicians to prevent a government shutdown is Friday, November 17, at midnight. They have just a few days to act. If not, a number of negative economic effects will be felt by the United States, including government employees’ missed pay, which will get worse the longer a shutdown lasts. Nevertheless, in spite of the short notice, it is currently anticipated that a government shutdown will either be avoided entirely or just last temporarily.
The Effects Of Every Government Close
The U.S. government must approve a continuing resolution by Friday, November 17, at midnight, or it will shut down. Important government services would remain operational throughout any shutdown, and government workers would not be paid at that time.
A government shutdown would normally result in delayed pay for employees, but it is crucial to remember that many federal operations, including as Social protection, Medicare, the U.S. Postal Service, law enforcement, the military, air traffic control, border protection, and others, would remain unaffected.
This is sometimes because the department has a different financing source from the government’s yearly budgeting process, and other times it’s because certain tasks are considered essential. Nevertheless, a possible shutdown would have two main effects: many other government agencies would either stop operating entirely or only operate minimally.
The first is that workers would not be paid during the shutdown, but they would get paid back after it is over. This holds true whether or not the government worker is mandated to report for duty during the shutdown. Employees who are not required to work are furloughed; those who are are referred to as excepted employees. For government contractors, the situation is less clear and there is no certainty of back pay.
For hundreds of thousands of government workers, any payment delay can cause serious disruptions. However, only federal employees are affected by this issue; state and local government personnel are not immediately impacted. The historical briefness of government shutdowns can be attributed, in part, to this degree of pay disruption. In the past, shutdowns have often lasted a few hours or days, and they are not common enough to span a week. Nevertheless, at 35 days, the most recent government shutdown in history occurred in 2028–19.
Second, during a shutdown, a lot of non-essential government operations are suspended. At the presidential level, there is some latitude in determining which government operations are essential and which are not. This judgment may affect how much of a disturbance a shutdown produces.
However, during the duration of any shutdown, many government functions—such as economic reporting, national parks, NASA, and the majority of research functions—see a reduction in operations. Since permitting, inspection, and regulation-related government functions are usually regarded as non-critical, they would probably be curtailed or suspended in many circumstances.
As a result, a government shutdown would disrupt and postpone numerous regular government procedures in addition to delaying the payment of many employees. It is noteworthy that the government usually stops reporting on its economic activities during a closure, which makes estimating the shutdown’s effects on the economy more difficult.
The Chronology
To prevent a shutdown, a continuing resolution needs to be approved by Friday, November 17, at midnight. As of right now, it is anticipated that a shutdown will not occur. A government shutdown is now predicted by the forecasting website Kalshi to occur 1 in 5 times. There is a plan to do so. While there is a chance of a shutdown, it is thought that a continuing resolution is most likely.
The present plan calls for the House to approve two distinct clean continuing resolutions in order to maintain government operations. If successful, this strategy would, however, increase the likelihood of a partial government shutdown for several federal departments on January 19 or February 2, 2024. That is.
Continuing resolutions generate more deadlines rather than fully addressing the budgetary issue because they usually roll forward the budget from the previous year for a few weeks instead of setting a new budget for the current fiscal year. This is why continuing resolutions are used to keep the government open.
Nevertheless, continuing resolutions have long been a feature of American budgeting, as a complete budget is almost never approved by the October 1st deadline for the government’s fiscal year. The government frequently uses continuing resolutions to fund itself, but the brinkmanship involved in the current process is less common and partly due to the current political impasse between the Democratic-controlled Senate and the Republican-controlled House, as well as the extremely narrow Republican majority in the house
Next Steps
Tense talks to see if a government shutdown can be averted in the next several days will probably include two continuing resolutions for separate departments.
The most likely result is that the shutdown risk is avoided for the time being and the resolution is extended until 2024. That would, however, result in comparable shutdown deadlines in early 2024. If not, the wider economy can be affected by the economic disruption caused by any shutdown that lasts longer than a few days. The possibility of a partial government shutdown in 2024 that affects some departments but not others could increase if two separate continuing resolutions are approved.