And what will happen if it occurs?
An FKD Feature exclusive

If you haven’t been paying attention, President Donald Trump really, really, (really) wants to build a wall between the U.S. and Mexico because he wants to protect the border from illegal immigrants passing through it. And he wants $5 billion from Congress in order to do it. Meanwhile, Democrats are not so enthusiastic about the prospect of securing that amount of money for such a construction, and they agree to about $1.2 billion instead. In the fallout of the standoff between Democratic support and the President’s steely resolve to secure said $5 billion for the wall, a government shutdown is likely to occur. Trump has met at the White House with House Democratic Leader Nancy Pelosi, and Chuck Schumer, the top Democratic senator, and declared: “I will be the one to shut [the government] down” if he doesn’t get the funding he wants for border security. “And I am proud to shut down the government for border security.”

But what exactly does a shutdown even mean?

Government shutdown, defined

A government shutdown occurs when Congress fails to appropriate funds upon which the federal government relies in order to operate. The main reason why Congress might fail to secure funding for the government is due to partisan disagreement. During a government shutdown, non-essential discretionary federal programs close. A shutdown can be prevented by what is called a “continuing funding resolution.” Although, if Congress cannot agree upon a CR, which happens when the parties can’t even come to a temporary compromise, then it forces a shutdown. It signals a complete breakdown in the budget process.

What happens when the government shuts down?

The discretionary budget funds most federal departments. But those that provide essential services are not shut down. Essential services are those that include defense, national safety and security. The immediate effect of a government shutdown involves the furloughing of government employees. Furlough is when an employee is suspended without pay. Americans who depend on certain key suspended services are also furloughed during a government shutdown, and, as the shutdown continues, more services succumb to the shutdown and are forced to cease operations.

Here are the major departments that shut down:

  • Commerce, except National Oceanic and Atmospheric Administration
  • Education
  • Energy. Functions that oversee the safety of the nation’s nuclear arsenal, dams and transmission lines remain open.
  • Environmental Protection Agency
  • Food and Drug Administration
  • Health and Human Services
  • Housing and Urban Development
  • Interior, including National Parks. The Department of Interior announced on Jan. 19, 2018, that parks would remain open despite a shutdown.
  • Internal Revenue Service, except those processing tax returns
  • Labor, including Bureau of Labor Statistics
  • NASA
  • National Institute of Health
  • Smithsonian. The agency used prior funds to remain open Jan. 22, 2018.

If the shutdown continues beyond two weeks, it will affect economic growth. That’s because government spending is, itself, a component of gross domestic product. It contributes 18 percent of economic output.

As of now, a shutdown is likely to occur.

Here’s a silver lining

A government shutdown, as has been said, has been sparked mainly by the fight between Trump and Democrats over his demand for a border wall. But a shutdown would have a smaller impact than other shutdowns in recent years.

This smaller impact is due to the fact that Congress and Trump already have approved funding bills for three-quarters of the needed $1.2 trillion in operating expenses for federal agencies. As a result, only some agencies, and considerably less than if three-quarters had not been previously approved, will be forced to close when funding runs out. And even in those cases, essential employees still would report to work.

Takeaway

It is a fact that even a limited shutdown could hurt the economy. Just as a “for example,” at the Department of Housing and Urban Development, 87 percent of the agency’s 7,800 employees would be sent home in the event of a government shutdown. “The Trump shutdown is something that can be avoided, that the American people do not need at this time of economic uncertainty, people losing jobs, the market in a mood and the rest,” Nancy Pelosi told reporters after meeting with Trump. So, if the government does shut down, we have to wait for one side, Democrats or Republicans, to blink and agree to cut a deal.

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Posted 01.01.2019 - 08:00 am EDT