US government shutdown: 7 things to know

The United States is facing the possibility of a full government shutdown in a matter of days due to political deadlock over demands from right-wing congressional Republicans for deep public spending cuts.

In the light of another US governmental shutdown facing Washington seeing as Congress cannot find common ground on budget issues for 2024, the Guardian has answered the seven most important questions on this emergency measure. 

Funding for federal agencies is set to run out at midnight on September 30 unless Congress votes to pass 12 appropriations bills to finance government operations in time for the start of the new financial year on October 1.

This potential shutdown could disrupt public services, cause salary delays, and harm the national economy if it becomes prolonged. The situation revolves around the uncertain status of Republican House Speaker Kevin McCarthy, who faces criticism from members of his own party for agreeing to spending limits with President Joe Biden that some far-right Republicans want to trim.

What happens when a US government shutdown takes place?

A government shutdown in the United States could have several significant impacts, including:

• Furloughed Federal Employees: Thousands of federal government employees are placed on furlough, meaning they are not allowed to report to work and do not receive their salaries during the shutdown. However, they typically receive retroactive pay once the shutdown ends.
• Essential Workers Without Pay: Government employees who perform essential services, such as air traffic controllers and law enforcement officials, continue to work but do not receive their salaries until Congress resolves the shutdown.
• National Parks: National parks may either close entirely or remain open with limited services, such as public toilets or attendants, depending on the duration of the shutdown.
• Passport Processing: Passport processing can come to a halt, potentially affecting travel plans for individuals awaiting their passports.
• Research and Health Institutes: Research activities at national health institutes may be interrupted, affecting ongoing studies and public health efforts.
• Food Safety and Water Inspections: Federal inspections ensuring food safety and preventing the release of dangerous materials into drinking water may stop during the shutdown, posing potential risks to public health.
• Head Start Program: Approximately 10,000 children aged three and four may lose access to the Head Start program, which promotes school readiness, particularly among low-income families.

The specific impact and duration of a government shutdown can vary, but it generally disrupts government operations and can have economic and social consequences.

What causes a shutdown?

This legislation is a critical component of the budget and appropriations process in the United States, ensuring that government agencies operate within their allocated budgets and that Congress maintains control over federal spending.

If Congress fails to enact the 12 annual appropriations bills needed to fund the US government’s activities and associated bureaucracy, all non-essential work must be halted until it does. If Congress enacts some bills but not others, the agencies affected by the bills not enacted are forced to cease normal functioning; this is known as a partial government shutdown.

How unusual are US government shutdowns?

For the first two centuries of its existence, the United States experienced no government shutdowns. However, in recent decades, they have become a recurring feature of the political landscape, driven by increasing polarization in Washington and the frequent use of brinkmanship as a political tactic. Since 1976, when the US shifted its fiscal year start to October 1st, there have been a total of 20 federal funding gaps.

Three government shutdowns stand out in US political history:

1. In 1995, a 21-day partial government shutdown occurred due to a dispute between President Bill Clinton and Republican Speaker Newt Gingrich. The disagreement centered on spending cuts and is often seen as setting the stage for later partisan congressional conflicts.
2. In 2013, the government experienced a 16-day partial shutdown when a Republican-led Congress attempted to defund President Barack Obama's signature Affordable Care Act, commonly known as Obamacare. This move resulted in a prolonged political standoff.
3. The longest government shutdown on record lasted for 34 days from December 2018 to January 2019. It occurred when President Donald Trump refused to sign any appropriations bill that did not include $5.7 billion in funding for a border wall along the US-Mexico border. This lengthy shutdown had detrimental effects on Trump's approval ratings and created significant political and economic disruptions.

What is triggering the latest imminent shutdown?

In large part, the crisis is being driven by the relatively weak position of the Republican speaker in the House of Representatives, Kevin McCarthy. Working with a wafer-thin majority in the 435-seat chamber, McCarthy needed a record 15 ballots to ascend to his position last January, a position earned only after tense negotiations with a minority of far-right Republicans.

Those same rightwingers are now in effect holding McCarthy hostage by refusing to vote for the appropriations bills on the basis of spending guidelines the speaker previously agreed with Biden. McCarthy could, theoretically, still pass the bills with the support of Democrats across the aisle. But rightwingers, notably the Florida congressman Matt Gaetz, have vowed to topple him as speaker in such a scenario.

Is there a way out of the current impasse?

McCarthy and other Republican leaders have been exploring the possibility of implementing a stopgap spending measure called a "continuing resolution" (CR) that would keep the government open until 31 October, while negotiations on finalizing the spending bills for 2024 continue.

However, even that has failed to win approval of Freedom Caucus members, who are refusing to vote for it unless it has more radical conservative policies attached, such as language to address “woke policies” and “weaponization of the Department of Justice”. A list of amendments from the rightwing Georgia congresswoman Marjorie Taylor Greene includes a resolution preventing funds being used to aid Ukraine and a ban on funding for Covid-19 vaccine mandates.

How could a shutdown affect the wider economy?

During the Trump-era, the 2018-19 shutdown imposed a short-term cost of $11bn on the US economy, an estimated $3 billion of which was never recovered after the stoppage ended.

Economists have warned the effects now could be compounded by other unrelated events, including the lingering impact of inflationand the United Auto Workers strike against America’s three biggest car manufacturers, which union leaders have threatened to expand if their demands are not met.

How has Joe Biden reacted?

The president has tried to use the bully pulpit to put the spotlight on the GOP holdouts, emphasizing that they should be blamed if a shutdown does go ahead.

“Let’s be clear. If the government shuts down that means members of the US military are going to have to continue to work but not get paid”, Biden said at a dinner hosted by the Congressional Black Caucus Foundation at the weekend, emphasizing that the GOP are to blame if a shutdown should occur. “Funding the government is one of the most basic responsibilities of Congress. It’s time for Republicans to start doing the job America elected them to do”.

Fearing the worst, however, the White House has published a set of blueprints for how government agencies should operate if a shutdown ensues and funds run out.