What Occurs If Federal Businesses Shut? – CBS San Francisco
(CBS Detroit) – The federal government is aiming for another shutdown. The government’s fiscal year ends Thursday, September 30th, but lawmakers have yet to fund the government or suspend the debt ceiling. If nothing happens by Friday, most federal employees will go out of work and many Americans could experience a loss of certain services.
How does this happen?
The state spends more money than it receives in tax revenue. This annual budget deficit is covered by additional borrowing. But there is a limit to how much the country can borrow to meet its existing obligations. It’s called the debt ceiling. This cap is raised or suspended as spending nears its limit, allowing the government to borrow more money and stay open. But without an agreement in Congress, the Treasury Department cannot continue paying the federal government’s bills.
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The debt ceiling was introduced over a century ago to prevent federal agencies from ignoring the right of Congress to control spending. For decades it was a relatively routine event without much fuss. But the decision has become increasingly politicized in recent years.
On Monday, Senate Republicans blocked a bill that would have suspended the debt ceiling through December 22 and funded the government through December 3 to avoid a shutdown. The votes fell along party lines, remaining 10 fewer than the 60 it took to overcome a filibuster. The reconciliation, which would only require 50 votes plus the Vice President’s tiebreaker, is likely the next step.
If the government does not raise the debt ceiling, it will soon face default on its loans. Any default would be the first in the country’s history and would shake the country’s and world’s financial markets. Treasury Secretary Janet Yellen told Congress Tuesday that the federal government will no longer be able to pay its bills as of October 18.
Which services can see changes?
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If Congress doesn’t raise or suspend the debt ceiling by midnight Thursday, a full government shutdown would begin on Friday morning. Only essential federal employees report on this day and every day until the limit is raised. Unnecessary employees would stop working. The federal government employs around 2.1 million people, not counting the postal service. And every agency has its own shutdown procedures, so the definition of “significant” varies. When the government saw a partial shutdown in early 2018, around 850,000 workers stayed at home. The potential scope of a shutdown this year could easily match or exceed that number.
As each agency executes its own shutdown plan, it is unclear which services will be affected. Based on previous experience, it seems possible that national parks will be closed to visitors. Parks were closed during the 2013 closure, but some stayed open during the 2018-19 closings. The National Science Foundation, the Fish and Wildlife Service, the US Geological Survey, the Environmental Protection Agency, and the National Institute of Standards and Technology stopped all work three years ago.
Other government work will almost certainly be delayed as well. The Internal Revenue Service could stop verifying income and social security numbers, which could lead to delays in personal loans. The Federal Housing Administration and Small Business Administration may also not be able to process new loan applications. Parts of the Centers for Disease Control and Prevention and the National Institutes of Health could shut down, which doesn’t seem ideal during an ongoing pandemic. It is unclear how a shutdown would affect clinical trials of the COVID vaccine for children ages 5 to 12.
What about essential services?
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Employees who are considered indispensable must continue to report for work free of charge. Based on past downtimes, many services that millions rely on should be continued for a short time. This includes border protection, air traffic control, law enforcement and maintenance of the power grid. The post will continue to arrive as the post is self-financing and does not rely on federal tax money. Social security checks and grocery stamps will also continue to arrive.
