How you could feel the impact of a U.S. government shutdown (2023)


By Aimee Picchi

/ MoneyWatch

U.S. at risk of unprecedented financial crisis

Americans, including hundreds of thousands of federal employees, could soon feel the impact of a U.S. government shutdown. If lawmakers don't reach an agreement by the end of Thursday — the last day of the fiscal year — the federal government will officially close as of 12:01 a.m. on Friday.

Congress moved one step closer to a shutdown after Senate Republicans late Monday blocked a billto fund the government at current levels and suspend the debt ceiling. But on Thursday it appeared that a shutdown would be averted, with the Senate poised to approve a short-term government funding bill that keeps federal agencies open through early December and staves off a partial government shutdown.

  • Update: Schumer announces agreement to prevent government shutdown

Most Americans would notice the disruption in one way or another. Many national parks would likely shut down, while mortgage and other loan applications could be delayed because the IRS could stop verifying income and Social Security numbers, according to the Committee for a Responsible Federal Budget (CRFB), a nonprofit group that focuses on fiscal issues.

Government services that are deemed essential — typically tasks important to safety and national security, such as border protection and air traffic control — would continue despite a shutdown. But the disruption would come at a sensitive time, with many Americans struggling to regain their footing amid the ongoing pandemic and the economy grappling with the effects of the COVID-19 Delta variant.

"Every shutdown is different — there is a lot of discretion in the agencies about what they can continue to do," said Marc Goldwein, senior policy director at the CRFB. "Everything that's not essential has to stop, but there are different definitions of essential work."

For instance, there are questions whether work on COVID-19 vaccines at the Food and Drug Administration and the Centers for Disease Control and Protection would be considered essential. Pfizer on Tuesday said it had sent data to the FDA on its clinical trials for the vaccine in children from 5 to 12 years old.

The biggest impact may be felt by the hundreds of thousands of federal workers who are likely to be furloughed if a shutdown occurs, experts say.

"You have 2 million civilian employees that are working hard across the country," Max Stier, president of the nonpartisan think tank Partnership for Public Service, told CBSN. "You have told all of them that there may be a shutdown — that means that they have to actually stop working on things like the [Montana] train crash or dealing with the economic calamity caused by the pandemic."

The showdown in Congress comes as lawmakers are also debating a hike in the nation's borrowing limit, or "debt ceiling," adding to the potential political twists and turns. Here's what you should know if the government shuts down this week.

What would be the financial impact?

The last shutdown, from December 22, 2018, to January 25, 2019, was a partial closure since Congress had already enacted five of the 12 appropriations bills. But Congress hasn't yet passed any funding bills.

That means more federal agencies would likely be affected in a new shutdown. The partial shutdown in 2018-2019 was a record-setting 35 days, which reduced economic growth in the final three months of 2018 by $3 billion, the Congressional Budget Office estimated. It's unclear at this point how large the financial impact would be, since that partly depends on the length of a shutdown.

Which essential services would continue?

Each federal agency would have its own shutdown plan, which is coordinated by the Office of Management and Budget. Those efforts would determine which government activities would stop until the political impasse between Democrats and Republicans is resolves and funding is renewed.

But all essential services would continue. Here are some of the services that have been maintained in prior shutdowns, according to the CRFB.

  • Border protection
  • In-hospital medical care
  • Air traffic control
  • Law enforcement
  • Power grid maintenance

How many federal employees would be furloughed?

A full government shutdown would likely impact more federal workers than the prior partial shutdown in 2018, the Committee for a Responsible Federal Budget said.

It could be similar in scope to shutdowns in 2013 and in early 2018, when about 850,000 of 2.1 million non-postal federal employees were furloughed, the group estimated. In the 2018 episode, about 380,000 federal workers were furloughed, according to the Partnership for Public Service.

Furloughed federal workers aren't allowed to work during a shutdown and don't get paid while they're off, but would eventually receive back pay once the logjam is resolved. But that disruption could have a wider economic impact, according to American Federation of Government Employees public policy Director Jacqueline Simon.

"It's not only the federal employee who suffers when there's no paycheck on payday — their landlord doesn't get paid," she said. "The credit card company doesn't get paid, the utilities don't get paid. They don't go to the grocery store and buy groceries a lot."

Would benefits like Social Security and Medicare be impacted?

No, experts say. That's because Social Security, Medicare and Medicaid are mandatory spending programs, which means they aren't subject to annual appropriations.

But while the government would continue to disburse payments for Social Security recipients and people covered by Medicare and Medicaid, other services could be disrupted.

For instance, benefit verification as well as card issuance would be halted during a shutdown, the group said. That could create problems for some, as benefit verification is sometimes required when people apply for loans, mortgages or other services that require proof of income.

Would the post office continue delivering mail?

Yes, because the U.S. Postal Service doesn't rely on federal tax dollars for its operating budget.

In an unrelated change, however, the postal service's delivery standards would slowfor some patrons beginning on Friday, the USPS said Monday. That's due to an ongoing operational overhaul that Postmaster Louis DeJoy has said will stanch billions of dollars in losses and put the agency on the path to profitability.

"Mail traveling the greatest distances will be most affected, with a day or two of transit time added for some first-class mail and periodicals," the agency.said.

Would national parks be shut?

It's possible. The National Park Service shut all of its parks to visitors during the 2013 shutdown. But in the 2018 shutdown, many parks remained open while park services like trash removal were halted. Without staff to maintain the parks, some of the nation's iconic parks suffered from overflowing garbage and damaging behavior such as illegal off-roading.

Would the IRS continue to operate?

If a shutdown occurs, the tax agency might not be able to provide its normal service of verifying income and Social Security numbers. That would throw a wrench into applications for mortgages and other loan approvals as well as potentially delay loans from being processed, the CRFB said.

In the 2018 shutdown, the White House promised that tax refunds would not be affected, reversing an IRS plan to halt the checks during the gap. Despite that pledge, refunds didn't go exactly as planned: "At least 26,000 furloughed IRS employees were recalled to work during the 2018-2019 shutdown in preparation for tax season, but14,000 did not show upto work without pay," the CRFB said.

Would food stamps get delayed?

Funding for the food stamp program — called the Supplemental Nutrition Assistance Program — is mandatory, but the government's ability to distribute the benefits to its 42 million recipients could be impacted, the CRFB said.

That's because a stopgap funding bill would be needed to authorize the Department of Agriculture to send out benefits for 30 days after the start of a shutdown. In the 2018 shutdown, the USDA avoided that issue by paying food stamp benefits early in January of 2019. If it hadn't done so before the 30-day window expired, the agency wouldn't have been able to pay the benefits in March, according to the CRFB.

What else could be impacted?

Many more government agencies and programs would be halted, although it's unlikely that Americans would be aware of many of the disruptions. In the 2018 shutdown, agencies including the National Science Foundation, Fish and Wildlife Service, U.S. Geological Survey, Environmental Protection Agency, National Institute of Standards and Technology, and NOAAhad to suspend their work.

Yet while Americans might not notice the halt in agency programs in the event of a shutdown, such stoppages could have very real effects. For example, "In 2013, the Environmental Protection Agency halted site inspections for 1,200 different sites that included hazardous waste, drinking water, and chemical facilities," the CRFB said.

What about a possible debt default?

That's a related issue that has experts concerned about its potential impact on the economy, jobs and the stock market.

Democrats earlier this week attempted to pass a stopgap measure that would have funded the government through December 3 and suspended the debt limit through December 2022. But Republicans are refusing to raise or suspend the debt limit, and if that happens, the country could go into default for the first time in U.S. history.

The stopgap bill the Senate is preparing to take up on Wednesday would keep the government running through December 3, but it does not address the looming deadline to raise the debt ceiling to avoid default.

The Treasury Department on Tuesday estimated it would exhaust the measures allowing the U.S. government to pay its bills on October 18, if Congress does not act to raise or suspend the debt limit.

If the U.S. defaults, the nation could plunge into another recession this fall, according to an analysis by Moody's Analytics chief economist Mark Zandi. The fallout would wipe out as many as 6 million jobs and erase $15 trillion in household wealth, he estimated in a report.

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How does a government shutdown affect me? ›

When there is a government shutdown, federal agencies are required to classify their employees as either "essential" or "non-essential." The employees classified as "essential" continue to work during the shutdown. However, the employees classified as "non-essential" are put on unpaid furlough.

How does a government shutdown affect government employees? ›

Pay Status

During a government shut-down, employees who are not required to work under one of the exceptions above may not even volunteer their services. Employees not required to work are “furloughed,” that is, placed in a non-pay, non- duty status, until the shut-down ends.

What happens when Congress shuts down? ›

In a “shutdown,” federal agencies must discontinue all non-essential discretionary functions until new funding legislation is passed and signed into law. Essential services continue to function, as do mandatory spending programs.

What is a government shutdown quizlet? ›

in U.S. politics, a government shutdown is a situation in which the government stops providing all but "essential" service. among. A shutdown can happen when disagreement exists among the Senate, the House, and/or the President regarding a budget to finance government programs.

How does the government shutdown affect the economy? ›

CBO estimates that the partial shutdown delayed $18 billion in federal spending and suspended some federal services, thus lowering the projected level of real GDP in the first quarter of 2019 by $8 billion (in 2019 dollars), or 0.2 percent.

Are government shutdowns good or bad? ›

Government shutdowns are bad for the economy.

A 2013 Macroeconomic Advisors paper found that government shutdowns can impose costs on the economy such as increased unemployment rate, lowering the growth in gross domestic product (GDP), and raising the cost of borrowing.

What does a government shutdown mean for US citizens? ›

Shutdowns cause the disruption of government services and programs, including the closure of national parks and institutions (in particular, due to shortages of federal employees).

Does government shutdown affect taxes? ›

During a government shutdown, you still owe taxes, and you'll be required to pay them. You should still file taxes according to the usual tax deadlines during a shutdown.

How does a government shutdown affect the military? ›

Although active-duty troops and Guard and Reservists on active-duty orders are expected to show up for work during a shutdown, they do not get paid unless Congress passes a separate piece of legislation to do so.

Why do people shut down? ›

Why People Emotionally Shut Down. Trauma, prolonged stress, anxiety, depression and grief all contribute to feeling emotionally shut down. Nemmers says medication, while lifesaving for many, can also trigger a side effect of emotional numbness.

What happens to the federal register when the government shuts down? ›

If experiences a system outage, we will not be able to restore service until funding is provided. As a reminder to agencies, because OFR does not normally receive USPS deliveries at our location, we cannot guarantee that we will receive any documents sent via USPS, at least not in a timely fashion.

How does a government shutdown affect the Treasury bonds? ›

A shutdown does not affect the flow of Social Security benefits or the Treasury's ability to pay its debt. By contrast, a default would indicate that the country was unable to pay those debts.

What is a forced shutdown called? ›

A hard shutdown is when the computer is forcibly shut down by interruption of power. Graceful shutdowns are generally performed intentionally by users, as a part of their daily routines, at the end of a work day or when finished with home use of a computer.

What is called shutdown? ›

: the cessation or suspension of an operation or activity.

What will lead directly to a government shut down quizlet? ›

What will lead DIRECTLY to a government "shut down"? The President vetoes Congress's appropriations bills.

How does the US government affect the economy? ›

Governments influence the economy by changing the level and types of taxes, the extent and composition of spending, and the degree and form of borrowing. Governments directly and indirectly influence the way resources are used in the economy.

How does government shutdown affect air travel? ›

If the government does shut down, air traffic controllers will still be required to report to work. The air traffic controllers are so vital to the commerce of the United States that they could shut down “the shut down” as they did on January 25, 2019. A short-term shutdown could be manageable.

How many days has the government been shut down? ›

The United States federal government shut down from midnight EST on December 22, 2018, until January 25, 2019 (35 days) was the longest government shutdown in history and the second and final federal government shutdown involving furloughs during the presidency of Donald Trump.

Why is government shutdown so bad? ›

A major loss of government revenue comes from lost labor from furloughed employees who are still paid, as well as loss of fees that would have been paid during the shutdown. Shutdowns also cause a significant reduction in economic growth (depending on the length of the shutdown).

Why does a government shutdown cost money? ›

Budget experts and past analyses by the White House budget office have found that a shutdown hurts the U.S.' finances in a number of ways. Furloughed workers almost always get paid retroactively for the time they were out—which means taxpayers are laying out money without getting any work in return.

How did COVID affect the government? ›

With the COVID-19 pandemic sweeping the nation, counties are seeing major drops in revenue and major increases in expenditures like health, emergency operations, justice, education, housing and other categories that together comprise 65 percent of county expenditures.

What happens if a budget does not pass? ›

If Congress does not pass all appropriations measures by the start of the fiscal year (October 1), it has to enact a continuing resolution to keep the government running. The Senate Committee on the Budget was established in 1974 by the Congressional Budget Act (

What happens to federal employees if government defaults? ›

And default is actually just all the payments, any money coming out of the government stops. So for federal employees and retirees, that means that salaries wouldn't be paid. Annuities would not be paid. Social Security would presumably not be paid.

When the government takes in more revenue than it spends? ›

When a government spends more than it collects in taxes, it is said to have a budget deficit. When a government collects more in taxes than it spends, it is said to have a budget surplus. If government spending and taxes are equal, it is said to have a balanced budget.

How much money does the government make a year off taxes? ›

Individual income taxes accounted for more than half of total revenues for the federal government in 2022. The US collected $5.03 trillion in federal revenues in 2022, up $630 billion from the previous year, after adjusting for inflation.

What happens when the government lowers tax rates? ›

Tax cuts reduce government revenues and create either a budget deficit or increased sovereign debt. Critics often argue that the tax cut benefits the rich at the expense of those with fewer resources as services beneficial to those in a lower income bracket are cut.

Why does the government increase or decrease taxes? ›

To reduce the total level of spending, the government could increase tax rates. As more income is collected in taxes, less is available for spending, reducing inflationary pressures.

Will government shutdown affect veterans? ›

WHAT ABOUT VETERANS' BENEFITS? During a federal government shutdown, military retirees and Survivor Benefit Plan recipients receive their pension checks with no interruption. That's because the funds for the pension checks are not linked to the current disputed federal budget.

Is it a crime to quit the military? ›

Also known as desertion, it is no light matter and can lead to serious consequences. If AWOL for more than 30 days, a warrant for your arrest can be issued, resulting in a possible federal arrest and conviction.

Will I get my military retirement check if the government shuts down? ›

Retirees' checks. A government shutdown won't affect payments for retirees or those receiving annuities, like surviving spouses who are paid under the Survivor Benefit Plan, said Steve Burghardt, a spokesman for the Defense Finance and Accounting Service. Those funds come from a military retirement trust fund, he said.

Is it normal for people to shut down? ›

Shutting down emotions can be a normal part of human experience, as a coping strategy in stressful situations. Under high stress, it allows your body and brain to protect itself from perceived threats or harm.

Why does my boyfriend shut down? ›

It's important to remember that shutting down is usually a defense mechanism that people use when they feel overwhelmed or threatened. When your partner shuts down, they're usually not trying to hurt you or end the conversation; they're just trying to protect themselves from feeling overwhelmed.

What to do when people shut down? ›

What to do when someone you love shuts down
  1. take a break from, or “table” the conversation.
  2. write down your thoughts and feelings to revisit later.
  3. stay calm.
  4. don't retaliate.
  5. don't throw an adult temper tantrum.
  6. do something self-soothing.
  7. consider professional intervention.
Sep 2, 2021

Can a president shut down a government agency? ›

It permits the president to divide, consolidate, abolish, or create agencies of the U.S. federal government by presidential directive, subject to limited legislative oversight. First granted in 1932, presidential reorganization authority has been extended to nine presidents on 16 separate occasions.

What is the final rule stage? ›

Final Rule Stage

After the comment period closes, the agency reviews all comments received and conducts a comment analysis. Then agencies decide whether to proceed with the rulemaking process or issue a new or modified proposal. In some cases they withdraw the proposal.

Why is the Federal Register so important? ›

The Federal Register brought order to the administrative process by providing a uniform system for filing and publishing documents and by ensuring the american public access to government information and evidentiary material.

How do government bonds affect the economy? ›

Bonds affect the U.S. economy by determining interest rates, which affect the amount of liquidity and determines how easy or difficult it is to buy things on credit or take out loans for cars, houses, or education. They impact how easily businesses can expand. In other words, bonds affect everything in the economy.

What happens when government bonds fall? ›

When bond yields fall, it results in lower borrowing costs for corporations and the government, leading to increased spending. Mortgage rates may also decline with the demand for housing likely to increase as well.

How do government bonds affect money supply? ›

If the Fed buys bonds in the open market, it increases the money supply in the economy by swapping out bonds in exchange for cash to the general public. Conversely, if the Fed sells bonds, it decreases the money supply by removing cash from the economy in exchange for bonds.

What are the two shutdown rules? ›

Conventionally stated, the shutdown rule is: "in the short run a firm should continue to operate if price equals or exceeds average variable costs." Restated, the rule is that to produce in the short run a firm must earn sufficient revenue to cover its variable costs.

What is shutdown problem? ›

The 'shutdown problem' is creating a sufficiently advanced Artificial Intelligence which will, on the press of a button, suspend itself safely to disk; such that the AI does not object to the existence of this button, nor try to prevent it from being pressed.

How many types of shutdown are there? ›

There are basically three types of system shutdown: Shutdown with immediate reboot (useshutdown's -r option) Shutdown with system halt (use shutdown's -h option)

What is the short key for shutdown? ›

Ctrl + Alt + Del

This method is handy for shutting down your laptop and closing current windows and applications that are unresponsive to your input. To use this combo, you must hold down the Ctrl and Alt simultaneously and press the Delete key to activate the operation.

What is the opposite of shutdown? ›

Opposite of a stoppage or sudden cessation of motion or progress. continuance. continuation. acceleration. encouragement.

What is safe shutdown? ›

Is the maximum earthquake potential for which certain structures, systems, and components, important to safety, are designed to sustain and remain functional.

What stops the US government from becoming too powerful? ›

Separation of Powers in the United States is associated with the Checks and Balances system. The Checks and Balances system provides each branch of government with individual powers to check the other branches and prevent any one branch from becoming too powerful.

What stops the government from becoming too powerful? ›

To be sure that one branch does not become more powerful than the others, the Government has a system called checks and balances. Through this system, each branch is given power to check on the other two branches. The President has the power to veto a bill sent from Congress, which would stop it from becoming a law.

How is the government broken down? ›

The Federal Government is composed of three distinct branches: legislative, executive, and judicial, whose powers are vested by the U.S. Constitution in the Congress, the President, and the Federal courts, respectively.

What are the risks with forced shutdown? ›

Data Loss or Corruption

While your hardware won't take any damage from a forced shutdown, your data might. If you are working on any files when things go bad, then at a minimum you will lose your unsaved work. Beyond that, it is also possible that the shutdown will cause data corruption in any files that you have open.

Does government shutdown affect mail? ›

This is because the USPS has been self-sustaining since 1982 and receives almost no congressionally appropriated funding. The shutdown only affects congressional funding that is approved annually, so self-sustaining operations like the Postal Service are spared.

How long do government shutdowns last? ›

The history of government gridlock shows a pattern: Shutdowns are usually resolved in just a few days, or they drag on for two or three weeks. The shutdowns start when the president and Congress can't agree on government funding — and the longer they last, the more they hurt the economy.

What happens in a hard shutdown? ›

A hard shutdown is when the computer is forcibly shut down by interruption of power. Graceful shutdowns are generally performed intentionally by users, as a part of their daily routines, at the end of a work day or when finished with home use of a computer.

Will government shutdown affect air travel? ›

The shutdown might be causing longer security lines at airports around the country. The Transportation Security Administration confirms that a growing number of its employees are calling in sick. But the president and the Department of Homeland Security deny a sickout is having much of an effect on air travel.

What agencies are affected by a government shutdown? ›

The government shutdown involves funding for the seven FY2019 appropriations bills not yet enacted: the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; Commerce, Justice, Science, and Related Agencies; Financial Services and General Government; Homeland Security; Interior, ...

Can the US government open your mail? ›

First-Class letters and parcels are protected against search and seizure under the Fourth Amendment to the Constitution, and, as such, cannot be opened without a search warrant.

Do federal employees get back pay after shutdown? ›

In past shutdowns, retroactive pay and leave has always been provided for furloughed employees through legislation, even though it was not guaranteed.

Has Congress passed a budget for 2023? ›

For fiscal year 2023, the bill provides $136.7 billion, an increase of $9.8 billion above the budget request and an increase of $20.5 billion above the fiscal year 2022 enacted level.

What is government default? ›

A sovereign default happens when a country's government fails to pay its debt obligations. A sovereign default can have serious economic consequences for the borrowing nation, making it harder and more expensive to borrow money in the future and pay its ongoing obligations.


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