With the U.S. government on the cusp of yet another shutdown, the impact on federal employees and services hangs in the balance. With over two million civilian federal employees, the threat of furloughs and service disruptions raises concerns among citizens and lawmakers alike. The looming deadline for a funding bill requires 60 votes in the Senate, making bipartisan agreement essential to avoid a shutdown.
According to our friends at the Bipartisan Policy Center, this has resulted in 14 government shutdowns since 1980. One of the biggest under-the-radar events occurred at the end of 2018. The federal government shut down for a historic five weeks in late 2018 and early 2019 over funding disagreements with then-President Donald Trump’s desired U.S.-Mexico border wall. As the shutdown went into effect, the devastating effects were felt nationwide. Yet, it caused the closing of hundreds of national parks and museums, as well as cuts to veterans’ services and health inspections.
The last complete federal government shutdown was in 2013. At one point during that period, nearly 850,000 federal employees were furloughed, notes the Committee for a Responsible Federal Budget. Furloughed workers rest assured that they will receive back pay upon returning to work. Federal contractors do not have this assurance and typically are not compensated during shutdowns. For that reason, many contractors go out of business during these stretches.
His proposed fiscal year 2024 budget continues to reserve 27% for discretionary spending. This allocation implies that a potential government shutdown will immediately affect all non-essential programs and services dependent on this funding. Long term mandatory spending programs, such as Social Security, usually do continue operating during a shutdown. That said, these programs are not impervious to impacts. Even during the shutdown in 1996, the government still mailed Social Security checks. The personnel in charge of processing new enrollments were put on furlough at first.
Given the political climate, finding common ground proves difficult. Democrats are advocating for a stopgap measure that includes health-care protections and extensions of enhanced premium tax credits under the Affordable Care Act. These important, job creating tax credits are set to expire at the end of the year. Currently, they assist in preventing out-of-pocket health care premiums from being unaffordable to more enrollees.
Republicans are demanding a “clean” resolution that would fund things as they were without other provisions. This deep-seated misunderstanding of what each side is giving and getting causes significant ambiguity. That deepens concerns that an omnibus agreement can be made before the Nov. 17 deadline.
If negotiations collapse, the government could close only days before some of our most important economic indicators come due. Friday, October 3 will see the Bureau of Labor Statistics’ September jobs report. … On October 15, we’ll get the Consumer Price Index (CPI) reading for September. Economic analysts are concerned that an impending shutdown could cause serious setbacks in data collection and data processing.
Wells Fargo economist Michael Pugliese emphasized these concerns, stating that “collection, processing and publication delays stretched into the following month as well.” He further pointed out that some of these reports “were lagged by at least two weeks,” which can seriously limit economic analysis during particularly sensitive times.