By Andy Sullivan

WASHINGTON – Government Shutdown Threat

Large portions of the U.S. government could close at midnight on Friday if Congress fails to pass a stopgap spending bill, urged by Donald Trump.

Why Would the Government Shut Down?

Congress must allocate funds to 438 agencies by Oct. 1, the fiscal year start. Rarely meeting this deadline, lawmakers typically pass temporary spending bills. The current bill expires on Saturday. Republicans and Democrats propose extending it to March 14, but Trump has called for a Republican vote against it.

What is the Debt Ceiling?

The debt ceiling caps how much the U.S. government can borrow. With spending surpassing tax revenue, Congress faces a challenging decision. Trump wants action on the debt ceiling before taking office, allowing him to focus on extending tax cuts amounting to approximately $4 trillion over a decade.

Historical Context

Since its establishment in 1939, the debt limit has been raised 103 times. As of October, publicly held debt was 98% of GDP. A 2023 budget deal suspended the ceiling until 2025, but Congress will need to address it next year to avoid defaulting.

Potential Consequences of a Shutdown

Fourteen shutdowns have occurred since 1981, many lasting only days. The most significant was 35 days between December 2018 and January 2019 over border security disputes. A shutdown could lead to furloughs for hundreds of thousands of workers and disrupt significant services.

Impact on Federal Services

Essential employees remain on the job without pay. Services like mail delivery continue, but disruptions may arise in various sectors, including national parks and airport security. Depending on the shutdown's duration, the broader economy may face setbacks, with estimated GDP impacts quantified.

Essential Functions

Each agency has contingency plans for employee operations during shutdowns. For example, a 2018-2019 shutdown resulted in 800,000 federal worker furloughs but retained essential services in various fields, including military operations and DOJ functions. National parks and IRS staffing face uncertain outcomes, reflecting past shutdown approaches.

Conclusion

In summary, if no agreements are reached by Friday, a significant part of the government could shut down with extensive repercussions for federal operations and the economy.