In the most recent developments in a budget battle, the US Senate Democrats have
rejected a proposal by the Republican-led House of
Representatives to put off Obamacare for a year in return for
temporary funding of the federal government beyond Monday.
Though adopting spending bills by Oct. 1, the start of the new
fiscal year in the US, may seem a purely political issue, if
Congress fails to approve funding for the federal government this
would seriously affect the daily routine of ordinary US citizens,
let alone up to 800,000 federal employees who would be sent home
Tuesday without pay if the shutdown takes place.
The last government shutdown lasted 21 days, from December 1996
to January 1997, and cost the administration of US President Bill
Clinton cost an estimated $2 billion, according to the White
House’s Office of Management and Budget.
1 Countdown to US default looms
A halt of US government operations would drag the world’s
biggest economy closer to bankruptcy, something unprecedented in
US history. If no budget deal is done, the US would bump up
against their “debt ceiling” and run out of money by October
17. By then, the US government would have less than $30 billion
cash on hand, Treasury Secretary Jacob Lew has calculated.
2 Hundreds of thousands of federal employees on furlough
A one-time layoff of 800,000 people working for the US
government would erode the earlier projected economic growth of
2.5 percent for the fourth quarter of 2013 by about 0.32
percentage points, according to a forecast by Mark Zandi, chief
economist and co-founder of Moody’s Analytics. That projection
assumes a two-week shutdown. If it drags into a whole month, the
loss of GDP would rise to 1.4 percentage points.
3 Troops’ paychecks stopped
About 1.4 million military active-duty personnel would
keep on working, but with their paychecks delayed. Approval for
troops’ paychecks is dependent on Obama’s proposed 2014 federal
budget being passed by Congress.
4 Women and children’s nutrition program threatened
Pregnant women and new moms who are poor and facing
“nutrition risk” won’t be able to buy healthy food, as a looming
shutdown would put bracers on the $6 billion Special Supplemental
Nutrition Program for Women Infants and Children (WIC).
5 $85 billion in cuts to federal programs
When a shutdown was last threatened in March 2013, it would have
resulted in $85 billion in automatic cuts in spending on federal
programs — many aimed at alleviating social hardship. The cuts,
known as sequestration, would affect grants to local
organizations and funds that keep those programs running.
6 Housing loans halted
US federal programs that provide for about 30 percent of all new
loans in the housing market — a backbone of the country’s economy
— will be shut down. Government funding of new businesses will
also be halted, as well as workplace health and safety
7 Trade talks scuppered?
US plans to have a Pacific trade deal, the Trans Pacific
Partnership, signed with the US’s Asian partners could stall, as
Obama may decide not to travel to this weekend’s Bali, Indonesia
meeting of the Asia-Pacific Economic Cooperation nations. While
he could still go if no deal is done by then, it could be a gift
for his Republican opponents if Obama was seen to be jetting off
to a tropical paradise at a time when federal employees were sent
home without pay.
8 Visa delays likely
Thousands of Americans may not be able to get passports
for foreign travel, and tourists travelling to the US will likely
face delays in visa processing. During the last government
shutdown in 1996-97, some 20,000-30,000 applications remained
9 Space program on hold
Space agency NASA will be hit the most, as the agency will
need to furlough about 97 percent of its employees, though it
will continue to keep workers at Mission Control in Houston and
elsewhere to support the International Space Station, where the
two NASA astronauts currently on board, Michael Hopkins and Karen
Nyberg, may not know whether they have jobs to come back to.
10 National parks, museums and zoos would close to the public
State-funded museums, art galleries and zoos across the country
would keep their doors closed Tuesday, leaving thousands of
employees furloughed and visitors unable to see attractions. US
national parks, from Yosemite to the Shenandoahs, as well as
Washington’s National Mall, Lincoln Memorial and Constitution
Gardens, would also be closed.