Who Is Affected If the U.S. Government Shuts Down? Real Implications

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Sep. 28 2021, Published 12:56 p.m. ET

As much as government shutdowns can feel like they're done for political show, they have real implications that impact American lives. The U.S. government hasn't shut down since before the COVID-19 pandemic. A potential shutdown could be on the horizon.

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Here's what happens when the government shuts down, including how it impacts efforts to curb the ongoing COVID-19 pandemic.

Threats loom of the first government shutdown since before the COVID-19 pandemic

As Democrats seek to suspend the debt limit in order to avoid a government shutdown, Republicans have blocked a bill that would make it a sure thing. Across party lines, Senate members are struggling to find a meeting ground on spending.

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If officials don't come to an agreement by the end of the week, we could approach a government shutdown.

Senate Majority Leader Chuck Schumer (Dem.) originally wanted to vote yes to pass the bill, but switched his response to no so he could bring the issue up again. Schumer said, "Keeping the government open and preventing a default is vital to our country's future and we'll be taking further action to prevent this from happening this week."

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Which employees get furloughed during a government shutdown?

Each federal agency has its own shutdown plan as organized by the OMB (Office of Management and Budget). Many agencies have to halt activities and temporarily furlough employees. A full shutdown turns off:

  • Social Security

  • Medicare

  • Food Inspection

  • Environmental Inspection

  • National Parks

  • Air Travel

  • SNAP Benefits

  • IRS

  • and more

A huge portion of federal workers would be furloughed, with the number increasing if the shutdown goes from a partial to full shutdown. In the government shutdown of early 2018, a total of 850,000 federal employees were furloughed out of 2.1 million non-postal employees total.

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Historically, these workers haven't received back pay since payments cease during shutdowns. However, legislation from January 2019 changed that.

What happens to the U.S. credit rating in a shutdown?

A government shutdown isn't as bad as a default. In a default, many more parties would be out of a paycheck. The government wouldn't be able to repay debts due to the debt limit. The economic impact would arguably be disastrous, which is why politicians are so keen on avoiding it.

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However, a shutdown has negative implications on credit, too. Since a shutdown could impact the government's ability to spend or borrow later in the year, it could prompt credit rating agencies to lower the nation's creditworthiness.

How would a government shutdown impact the average American?

During a shutdown, Americans wouldn't be able to access federal services that they've come to depend on. COVID-19 pandemic assistance is still part of our fiscal world, and a shutdown would cause that to halt.

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Meanwhile, the millions of Americans who are employed by the U.S. government would be out of work. Those living paycheck to paycheck would struggle as they await back pay.

Since the modern budget process of Congress started in 1976, there have been 20 "funding gaps" or shutdowns. However, there have only been four full shutdowns—two under President Bill Clinton, one under President Barack Obama, and one under President Donald Trump. The longest shutdown was under Trump, which lasted for 35 days. Ultimately, the timeline of a shutdown depends on the people in power.

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