Thursday marks the end of the federal government’s fiscal year and with it comes the threat of a government shutdown.
A stopgap government funding bill needs to pass both houses of Congress and be signed by President Joe Biden by 11:59 p.m. Thursday to avert a shutdown. Here’s a rundown of what could happen during a government shutdown.
- Q: What's going on in Congress that could lead to a shutdown?
Every year, Congress must pass 12 routine bills containing funding for federal agencies by the start of the new fiscal year: Oct. 1.
This year, the process is complicated by the fact that the deadline to raise the debt limit — a cap on the amount the U.S. government can borrow — is also approaching. The debt limit been raised or suspended nearly 80 times since 1960, but in recent years it has evolved into a political weapon.
Republicans in Congress say they won’t approve a funding bill that is tied to raising the debt limit. Democrats have since separated the two measures, which means a temporary government funding bill is more likely to pass.
- Q: Would this be a full or partial government shutdown?
If a funding bill isn’t passed by Thursday night, the lapse in appropriations would trigger a full government shutdown, since Congress hasn’t approved any of the 12 annual funding bills required to keep the lights on at federal agencies.
That’s different from the last government shutdown, which was historic for its length — 35 days — but was a partial shutdown since Congress had approved a handful of the funding bills.
- Q: How many workers would be affected?
During the last government shutdown — again, a partial shutdown — about 800,000 workers were impacted. That’s out of a total federal workforce of 2.1 million people.
The Congressional Budget Office later estimated about 300,000 employees — 38% of the affected employees — were furloughed during the shutdown, meaning they were sent home without pay. The remaining federal workers, including federal law enforcement, Border Patrol, the Coast Guard and others, remained on the job. While they were eventually paid, their paychecks were delayed.
- Q: What is the Biden administration telling federal workers?
In a statement last week, the White House Office of Management and Budget has urged federal agencies to being prepping for the possibility of a shutdown.
“We fully expect Congress to work in a bipartisan fashion to keep our government open, get disaster relief to the Americans who need it, and avoid a catastrophic default, especially as we continue to confront the pandemic and power an economic recovery,” Abdullah Hasan, spokesman for the Office of Management and Budget, said in a statement, as reported by Federal News Network. “In the meantime, prudent management requires that the government plan for the possibility of a lapse in funding.”
A number of federal agencies have updated shutdown plans, including the Internal Revenue Service, the Justice Department and the Smithsonian Institution, according to Federal News Network. The latter would send home nearly 80% of its staff with limited staff remaining on the job to care for animals at the National Zoo and secure buildings. The famous Smithsonian museums would close to the public.
- Q: Is backpay guaranteed?
Yes, but only for federal workers.
One result of the last shutdown was the Government Employee Fair Treatment Act, which required the government to provide backpay for all federal employees who were furloughed or required to work during the shutdown — and to be compensated “on the earliest date possible” after the shutdown was resolved. The law applies to any government shutdown after Dec. 22, 2018, meaning it would also apply if there’s a government shutdown this time around.
- Q: What about contractors' pay?
Federal contractors are not guaranteed backpay. During the last shutdown, an estimated 800,000 contractors were affected — and many were never made whole.
There were a few attempts to pass legislation that would require contractors to get backpay after the resolution of a government shutdown, those efforts fell short.
- Q: When was the last shutdown?
The last partial government shutdown happened in late 2018 and stretched for 35 days into early 2019. The shutdown, which lasted from Dec. 22, 2018, through Jan. 25, 2019, was the longest partial government shutdown in U.S. history.
The shutdown impacted nine of the 15 Cabinet-level departments and dozens of agencies, including the departments of Homeland Security, Transportation, Interior, Agriculture, State and Justice as well as national parks.
During that shutdown, the Pentagon and the Department of Health and Human Services were not affected because Congress had already approved funding.
There have been other shutdowns.
There was a brief three-day shutdown in January 2018 and a 16-day shutdown in October 2013.
And there was a 21-day government shutdown from December 1995 into early 1996.
- Q: What would the economic effect of a shutdown be?
The good news, according to the experts, is that the government would continue to disburse payments for Social Security, Medicare and Medicaid since those are mandatory spending programs that do not require annual funding approval by Congress.
Still, experts say a government shutdown would have a significant economic impact, especially if it drags on.
During the 2018-2019 shutdown, the Congressional Budget Office estimated the 35-day shutdown reduced the nation’s gross domestic product by a total of roughly $11 billion, including a permanent economic hit of $3 billion.
A big chunk of that came from the D.C. region, according to an analysis by regional economist Stephen Fuller, with George Mason University. He estimated there were more than 145,000 federal employees and more than 100,000 federal contractors in the area who missed paychecks during the shutdown — and another 100,000 other workers, such as restaurant and retail workers around the area who were indirectly affected.
- Q: What about the debt limit?
The rough deadline to raise the debt limit is Oct. 18, Treasury Secretary Janet Yellin told lawmakers this week. Failing to raise the debt limit would trigger an unprecedented default on the government’s obligations and likely lead to a financial crisis and economic recession, Yellin said.
The Democratic-controlled House is preparing to extend the debt limit through Dec. 16, however it’s unclear if the measure could pass the Senate because of Republican obstruction. Senate Majority Leader Mitch McConnell has said, since Democrats control both chambers, they can pass the measure on their own.
Democrats helped Republicans suspend the debt limit when Republicans controlled Congress. After Democrats retook the House in 2019, Speaker Nancy Pelosi negotiated a broader spending package with the Trump administration that included a debt ceiling hike.
The Associated Press contributed to this report.