What is a federal government shutdown? The Guardian explains

What is a government shutdown?

When the US Congress fails to pass appropriate funding for government operations and agencies, a shutdown is triggered. Most government services are frozen, barring those that are deemed “essential”, such as the work of the Department of Homeland Security and FBI.

During a shutdown, nearly 40% of the government workforce is placed on unpaid furlough and told not to work. Many, but not all, are non-defense federal employees. Active duty military personnel are not furloughed.

Why is the government poised to shut down?

Members of Congress are at an impasse over what should be included in a spending bill to keep the government open. Democrats have insisted any compromise must also include protections for the nearly 700,000 young, undocumented immigrants, known as Dreamers, who were brought to the US as children.

The Dreamers, who were granted temporary legal status under Barack Obama, were newly exposed to the threat of deportation when Donald Trump moved to rescind their protections in September. Trump and Republicans have argued immigration is a separate issue and can be dealt with at a later time. It remains unclear if Democrats have the votes, however, to force a shutdown over Dreamers.

How common is a shutdown?

There have been 12 government shutdowns in the US since 1981, although ranging in duration. The longest occurred under Bill Clinton, lasting a total of 21 days from December 1995 to January 1996, when the then House speaker, Newt Gingrich, demanded sharp cuts to government programs such as Medicare, Medicaid and welfare.

The most recent shutdown transpired under Obama in 2013, pitting the president against the Republican-led House of Representatives. Republicans refused to support a spending bill that included funding for Obama’s healthcare law, resulting in a 16-day shutdown that at its peak affected 850,000 federal employees.

What would be the consequences of a shutdown?

A government shutdown would cost the US roughly $6.5bn a week, according to a report by S&P Global analysts released in December. The analysis, which based its numbers off previous shutdowns, also predicted potentially devastating ramifications for the economy.

“A disruption in government spending means no government paychecks to spend; lost business and revenue to private contractors; lost sales at retail shops, particularly those that circle now-closed national parks; and less tax revenue for Uncle Sam,” the report stated. “That means less economic activity and fewer jobs.”

Nearly 1 million people would not receive regular paychecks in the event of a shutdown. In previous shutdowns, furloughed employees have been paid retrospectively – but those payments have often been delayed.