Just the Facts

Five Facts on Effects of Government Shutdowns

By No Labels
December 17, 2018 | Blog

Congress and President Trump have until December 21 to approve funding bills for 2019 before the federal government may experience a partial shutdown – a suspension of activity among some of the government’s most important agencies. Here are five facts on the potential government shutdown and its effects.

If the shutdown happens, it won’t be the first in history.

Since the modern budgeting process began in 1976 there have been 17 separate government shutdowns. Some presidencies saw multiple shutdowns: President Jimmy Carter’s administration saw five, and President Reagan’s administration saw eight. Contested topics that have caused shutdowns over the years include abortion, funding for missile programs, education spending, Medicare, and more. The longest government shutdown lasted 21 days, under President Clinton’s administration in 1995.

While 75% of the government has budget bills already approved, the remaining 25% includes high-profile departments.

Some of the remaining departments left unaccounted for thus far include the National Park Service, National Museums, Homeland Security, Department of Transportation, Department of Commerce, and the Justice Department. Independent but associated agencies such as NASA and the FDA will also experience partial shutdown if no agreement is reached by Friday, the 21st. While the State Department would continue issuing passports, if an office for obtaining a passport is inside another agency that is shut down, that office will be as well.

Hundreds of thousands of government employees could be affected.

Within agencies affected around 420,000 employees are considered “essential.” This means they are expected to work without receiving paychecks until the shutdown is completed. This includes TSA officers, who will be screening airline passengers during the holiday season but will have to wait for pay until the New Year. In addition to the 420,000 employees with delayed pay 380,000 will be furloughed – sent home without pay. Luckily, in all previous shutdowns, everyone sent home was paid retroactively after Washington legislators reached an agreement.

A prolonged government shutdown could preview bigger problems for Washington in 2019.

The Chicago Tribune reported that Capital Economics, a research firm, wrote on Friday “The biggest downside risk (to the economy) is a prolonged federal government shutdown that morphs into a full-blown debt crisis sometime in the first half of next year.” The firm is referring to the impending agreement the White House and Congress will have to reach in 2019 surrounding the debt ceiling. This will be the first major negotiating point under the Trump Administration where Democrats will control the House. Economists are also speculating that a lengthy shutdown duration could affect various markets including home-buying and tourism, as investor confidence might cool, economist Mark Zandi predicts.

Both Democrats and some Republicans believe there are more cost-effective border control options.

The key point of contention that could cause the shutdown is President Trump’s demand of $5 billion to pay for the construction of a border wall, which is being resisted by Democrats and some Republicans. Rep. Tom Cole (R-OK) commented, “I’m sorry that we’re in this situation, because the American people deserve better from both sides … .Everybody that’s at the leadership level, and I include the president and the Democrats, are putting their perceived political interests ahead of a solution, and ahead of what’s good for the American people. And, you know, no wonder people don’t like this place.”

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