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.
Years Of Government Shutdowns
Treasury Secretary Janet Yellen told Congress earlier this month that the country’s ability to pay its bills would likely run out sooner than planned. After Congress missed a July 30 deadline to raise or suspend the debt ceiling, the US Treasury employed “extraordinary measures” to allow the government to continue paying its bills, but Yellen said those measures would likely run out in October because of financial uncertainty caused by the pandemic.
Insider’s Ben Winck and Joseph Zeballos-Roig previously reported the debt ceiling was introduced in 1917 and had since been raised 57 times to prevent the government from defaulting. And while the US has always managed to avoid a default to prevent a lapse in critical benefits and an economic recession, raising the limit has become more of a bargaining chip than a financial threshold.
The first debt-ceiling-related government shutdown took place in 1995, when then-House Speaker Newt Gingrich demanded President Bill Clinton implement the Republicans’ proposal for a balanced budget, and ultimately caused the government to shut down for 21 days.
And similar political battles continued in following years. For example, in 2013, under President Barack Obama, the GOP refused to raise the debt ceiling unless the Affordable Care Act was defunded, which caused the government to shut down for 16 days.
House To Vote Thursday On Bipartisan Infrastructure Bill
Another piece of legislation expecting a House vote this week is the $1.2 trillion infrastructure bill, which includes $550 billion in new funding that the Senate has already approved.
The bipartisan infrastructure bill enjoys broad support. But progressive House Democrats have insisted that it move in tandem with a $3.5 trillion package of Biden’s priorities, which is still under negotiation between the House and Senate.
A group of nine moderate House Democrats got a commitment to vote Monday on infrastructure, whether the larger package was finished or not. The deadline slipped to Thursday, but a leader of the moderates, Rep. Josh Gottheimer, D-N.J., said it wouldnt slip again.
We’re going to have a big week. We’re going to bring the infrastructure bill to the floor, which she talked about, and we’re going to have the votes, Gottheimer said. And we’re going to continue doing what weve been doing, which is working on the $3.5 trillion package.
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Americans are tired of potholes damaging their cars, failing bridges, decrepit transit, trains that derail, water mains that explode, sewer systems that back up into their basement and pollute our rivers, DeFazio said.
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How Would A Government Shutdown Affect Its Covid Response
We dont know, in part because theres never been a government shutdown during a pandemic. Its likely Biden would prioritize government functions tied to covid response, and deem those workers essential.
But even if a shut down doesnt bring to a screeching halt the governments efforts to stem the spread of covid, lift up people economically and get more people vaccinated, it will complicate them in a way that could cost lives. All aspects of government are more difficult to operate when theres a shut down.
The worst time in the world we want to shut down the government is in the middle of a pandemic where we have 140,000 people a day getting infected and 2,000 people a day dying, Anthony S. Fauci, the presidents chief medical adviser, told The Washington Post.
Judiciary And Law Enforcement
During the shutdown, court-appointed private lawyers who represent indigent defendants worked without pay. The Federal Judiciary initially had a goal of sustaining paid operations through January 18, 2019. It said it would run out of money to sustain court operations no earlier than January 25, but perhaps as late as February 1. Failing funding, the Judiciary would operate under the terms of the Antideficiency Act. This Act does not allow federal agencies to expend federal funds before an appropriation, nor to accept any voluntary services. The judiciary had 33,000 employees nationwide. Under the Constitution, Supreme Court Justices, appeals court judges and district judges would continue to be paid.
The shutdown caused many delays and disruptions in cases. Budgets were watched carefully to be able to pay public defenders, DNA testing, informants, and travel costs to interview victims and witnesses. Staffing issues also brought about concerns and constraints with prisons lacking the staff to safely hold attorney-client visits, and caused a delay in bail hearings.
Investigation and enforcement
Federal law enforcement agencies working on Native American land worked without pay through the shutdown.
Homeland security
During the shutdown, a wave of Domain Name System attacks on government sites was detected by Homeland Security. The attacks were serious because these Internet sites could be hijacked.
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Office Of Management And Budget Begins Government Shutdown Prep Just In Case
By Betsy Klein, CNN
The government is due to run out of funding on September 30 without congressional action, so it’s about that time again. When the US government is within seven days of a potential shutdown, no matter the circumstances or state of play in funding negotiations, the Office of Management and Budget begins its standard shutdown planning protocol, reminding government agencies of the steps they should prepare to take.
- September 27: A self-imposed deadline for the House to vote on a bipartisan infrastructure deal, unlocking a path to the larger spending bill.
- September 30: Government funding expires at midnight, which could trigger a shutdown.
- Mid-October: The government reaches its borrowing limit, which could trigger a first-ever US default and a self-inflicted economic explosion if the US chooses not to pay its bills. It could halt paychecks to federal workers, Medicare benefits, military salaries, tax refunds, Social Security checks and payments to federal contractors.
White House: Biden Disappointed In Mcconnell And Gop For Refusal To Work With Democrats On Debt Limit
From CNN’s Jason Hoffman
President Biden is disappointed in Senate Minority Leader Mitch McConnells refusal to work with Democrats to raise the countrys debt limit, White House press secretary Jen Psaki said Wednesday.
Asked if the President was surprised McConnell wouldnt vote to raise the debt ceiling as he has done in the past, Psaki paused before saying surprised is an interesting way to phrase the question.
I think he’s disappointed more than surprised, she added.
The press secretary said President Biden and Senator McConnell have worked together in the past and also of course have their disagreements, but said there should be bipartisan support in raising the debt limit, as there has been in the past.
At the end of the day, protecting the full faith and credit of the United States, ensuring we’re paying our bills, ensuring we’re not going to have a devastating impact on American families, we’re not going to see the markets drop is something that there should be bipartisan support for and there has been historically. So disappointed, Psaki said.
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Why Were We Facing Another Shutdown
The longest government shutdown in history, which lasted for 35 days, occurred between 2018 and 2019. It began when Trump demanded funding for a $5.7 billion wall between the U.S. and Mexico and refused to sign a government funding bill that didnt include it. An estimated 800,000 federal workers and 1.2 million contractors went without pay during that period, which happened to be over the holidayswith some workers so negatively impacted that they filed for unemployment benefits.
Current federal funding got caught in the middle of a political showdown in Congressand lawmakers cut it close with passing a continuing resolution. But it happened.
In total, about 60% of the 2.1 million federal civilian employees would have been out of work without pay if lawmakers didnt come up with a new funding agreement.
Fda Authorizes Booster Shots Of Moderna Johnson & Johnson Covid
The Centers for Disease Control and Prevention will also see a great deal of change. Less than half of the agencys staff will be able to keep working during a shutdown, according to the agencys shutdown plan. The Biden official noted, however, that the agency will continue supporting the Covid-19 response, including maintaining laboratory functions and the agencys 24/7 emergency operations center.
The Food and Drug Administration is in better shape. The Biden administration official said it will keep up anything related to authorizations, any drug and medical product shortages, and fraudulent, counterfeit and misbranded products.
Sixty nine percent of FDA staff will keep working in the event of a shutdown, according to the agencys shutdown plans.
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Haven’t We Been Here Before
Yes, quite a few times. There have been 14 shutdowns since 1981, some lasting for just a day, others for over a month.
The most recent happened in 2019, when Democrats refused to agree to a budget that included $5.7 billion in federal funds to build then-President Donald Trump’s proposed wall along the Mexican border.
That shutdown gave us the iconic images of Mr Trump welcoming the winners of the national college football championship, the Clemson Tigers, with more than 300 McDonalds burgers as White House catering staff were prevented from working due to the shutdown.
That shutdown eventually came to an end after 35 days when Mr Trump relented on his demands.
Q& a: Everything You Should Know About Government Shutdowns
The new fiscal year will begin on October 1, 2020, and Congress has so far enacted none of the 12 appropriations bills setting discretionary spending levels. Lawmakers have until midnight on the final day of the fiscal year September 30 to enact legislation to fund the programs covered by the appropriations process, or the government will shut down. A continuing resolution to allow lawmakers more time to complete work on spending bills is likely to be considered. A shutdown in FY 2021 would affect all federal activities covered by discretionary appropriations, as opposed to the most recent FY 2019 shutdown that began in late 2018 and extended into early 2019 that affected departments and agencies covered by the seven appropriations bills that Congress had not yet enacted.
What is a government shutdown?
What services are affected in a shutdown and how?
Although many programs are exempt, the public is still likely to feel the impact of a shutdown in a number of ways. For example, in a full shutdown:
Is the government preparing for a shutdown?
OMB maintains a list of the various contingency plans federal agencies will follow during a shutdown. Most have been updated within the past two years, but some have not been updated since a previous shutdown threat in late 2015.
How would federal employees be affected?
How and why do mandatory programs continue during a shutdown?
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Will Another Government Shutdown Hurt The Stock Market
If history is any guide, then investors shouldn’t sell all their stocks and move into cash and gold amid fear of another government shutdown.
“History shows that U.S. government shutdowns generally have not meaningfully impacted equity returns,” points out David Kostin, Goldman Sachs chief U.S. equity strategist, in new research. Kostin crunched the numbers, and they support his view.
The S& P 500 posted median returns of -0.1% on the dates of budget authority expiration, 0.1% during the shutdown periods, and 0.3% on the dates of resolution in the 14 government shutdowns since 1980, Kostin said. One exception, however, was the most recent very contentious government shutdown in December 2018. The S& P 500 dropped 2% on the day spending authority expired, Kostin notes.
In all but three times going back to 1980, the S& P 500 generated positive returns during the government shutdown period.
Most sectors in the S& P 500 have held up surprisingly well amidst shutdowns, Goldman’s research shows. The energy sectors has tended to fare the worst, while consumer discretionary has performed the best.
Goldman isn’t on board though with investors completely ignoring the risks to stocks over a potential looming shutdown.
To be sure, the debate around the debt ceiling and any would-be shutdown is nearing a head.
Vote On Stopgap Funding Bill To Avert A Shutdown Set For Thursday Schumer Says
From CNN’s Clare Foran and Ali Zaslav
Senate Majority Leader Chuck Schumer announced on Wednesday night that Democrats reached an agreement with Republicans on a continuing resolution to fund the government and they will be voting on it tomorrow morning.
We have an agreement on the CR the continuing resolution to prevent a government shutdown and we should be voting on that tomorrow morning, Schumer said.
Schumer said beginning at 10:30 a.m. ET on Thursday the Senate will hold several amendment votes before they vote on the continuing resolution.
The House is expected to take the measure up once the Senate has acted. Government funding expires at midnight, but Democratic leaders have projected confidence that there will not be a shutdown.
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Food Stamp Delivery Challenges
The Supplemental Nutrition Assistance Program , commonly referred to as food stamps, has been a critical lifeline for families struggling with the economic consequences of the pandemic. Though a government shutdown wouldnt cut funding, it could result in food stamps not being able to be sent out. According to the CRFB, past continuing resolutions have only authorized the benefits to be sent out for 30 days after a shutdown begins. Should a shutdown go on longer than that, families that already have limited means could be forced to slash their grocery budgets.
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 NOAA had 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.
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And What Happens If The Debt Ceiling Isn’t Raised
First time ever, at some point between 15 October and 4 November, the US could default on its debts – currently standing at around $28 trillion – if the debt ceiling is not raised.
The implications of this for the US are catastrophic. In an article for the Wall Street Journal earlier this month, Treasury Secretary Janet Yellen warned that the US “would emerge from this crisis a permanently weaker nation”.
And because the US remains the world’s largest economy, a default by Washington could plunge the rest of the world into chaos too.
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.
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Will I Get My Social Security Check If There’s A Shutdown
Yes, Social Security benefits will continue to go out in the event of a government shutdown. That’s because Social Security, Medicare and Medicaid are among the mandatory spending that isn’t subject to annual appropriations from Congress.
While Social Security checks will continue to be sent out, some related services could be impacted. For example, benefit verification and the issuance of new Social Security cards would stop, the Committee for a Responsible Federal Budget said.
When it comes to Social Security checks, the bigger looming threat is the debt limit. Treasury Secretary Janet Yellen suggested last week in a Wall Street Journal op-ed that nearly “50 million seniors could stop receiving Social Security checks for a time,” if Congress fails to raise or suspend the debt ceiling. She warned Monday that if the debt limit isn’t raised by Oct. 18, the full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession.
Food Stamps Inspections And School Lunches
During the shutdown, 95% of federal staff for the USDA‘s Food and Nutrition Services were furloughed. The Supplemental Nutrition Assistance Program , the food-stamp program, could be funded through a $3 billion contingency fund appropriated by Congress in 2018 if the shutdown had continued through March 2019, those funds would have been exhausted, leaving some 38 million Americans without food stamps and endangering food security. Concerns were raised that continuation of the shutdown could delay the issuance of some $140 billion in tax refunds from the Internal Revenue Service .
School administrations raised concern about how to feed children who purchase food at the schools for lunch, as funding concerns caused some districts to conserve food and funding. Many limited the amount or variation of foods available for the children to purchase, and alerted parents to the concerns and the limited availability of some of the items. Most schools affected were in high-poverty areas, and depended on federally funded lunch programs, such as the Community Eligibility Provision a federal grant established by the Healthy, Hunger-Free Kids Act of 2010 and operated through the Department of Agriculture. Some 22 million students in nearly 100,000 schools received school meals through that operation.
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