The far reaching impact of a US federal government shutdown

The US government officially shut down at midnight after Congress and the White House failed to reach an agreement on how to extend federal funding.

This marks the third government shutdown under Trump's administration. During his first term, he encountered two government shutdowns, with the longest one occurring in late 2018 and early 2019, lasting 34 days - making it the lengthiest shutdown on US history.            

A US government shutdown would trigger a series of impacts, typically affecting the most vulnerable in American society. 

1. Federal employees will be forced to take unpaid leave

Approximately 800,000 federal employees will be forced to take unpaid leave, and contractor bills will not be paid on time. Many museums, national parks, and monuments across the country may close or reduce their opening hours. Some windows at the US Department of State's consulates and immigration offices will slow down their work or even close, and the processing times for passports, green cards, and visas will be lengthened.

2. Knock-on effect for low-income families

Millions of pregnant women and children's food stamps will be affected. Housing assistance and energy subsidies will also be delayed due to a lack of funds. The federal government's support for preschool education and school lunches may be forced to be paid by local governments instead, and the financial pressure on states and counties will sharply increase.

3. Transportation, travel, healthcare, public health, and other areas will all be affected

The shortage of manpower will not only lead to flight delays and frequent queues but also halt the approval of new routes, pilot training, and license issuance. In addition, the daily statistical updates of the Centers for Disease Control and Prevention, the approval speed of food and drug supervision agencies, etc., will also slow down, and the telephone customer service, case appeals, and other services of government medical insurance and other institutions will be difficult to obtain.

4. Other economic costs

US media believe that the government shutdown could cause the US economy to lose approximately $7 billion each week. The delayed payment of federal employees' salaries would affect consumer spending, and market anxiety over policy uncertainty would lead to increased volatility. If the "shutdown" persists for a long time and is intertwined with issues such as the debt ceiling and fiscal deficits, it could also result in an increase in the borrowing costs of the government.

Since 1980, the US government has been in a shutdown situation 14 times. The last major federal government shutdown, which occurred from December 2018 to January 2019, cost the American economy an estimated $11 billion, according to CBS News. The Congressional Budget Office reported that approximately $3 billion of that loss was permanent. 

(Cover via VCG)