After expressing his opposition to a budget agreement negotiated in the US Congress, Donald Trump gave his approval on Thursday to a new version proposed by Republicans, which allows considering the possibility of avoiding a paralysis of the federal State before Christmas.
But if the predominantly Democratic US Senate does not approve it before midnight on Friday, the United States will experience a partial “shutdown”, that is, the closure of certain public services, which will disrupt the functioning of many sectors. .
Who will be affected?
If an agreement is not reached before Friday, many officials will be unemployed, that is, “875,000 workers,” according to Shai Akabas, an expert at the Bipartisan Policy Center in Washington. “1.4 million” people “would continue to work as they are considered to be providing essential services” such as air traffic control and surveillance.
Civil servants will receive their salaries at the end of the “lockdown”, according to Bernard Yaros of Oxford Economics. A shutdown “would force hundreds of thousands of federal employees (…) to work through the holidays without receiving pay,” the Federal Government Employees Union (AFGE) warned in a press release published Thursday.
During the paralysis of 2013 and early 2018, “about 850,000 of the 2.1 million federal employees (excluding the postal service) were placed on technical unemployment,” recalls the Committee for a Responsible Federal Budget (CFRB), a bipartisan organization. .
What consequences?
Each ministry or agency establishes its own plan in the event of a “shutdown”, but essential services – such as border protection, hospital medical care, maintaining order or even maintaining the electrical grid – continue to function.
In the past, pension and health-related expenses for low-income people and seniors (Medicare and Medicaid programs) were also maintained, but enrollment applications were deferred, the CFRB highlights.
National parks could also be affected, since the “rangers” who care for them are federal officials. In 2013, more than 400 parks in the country were closed, with an estimated loss of revenue of $500 million. In 2018-2019, however, most parks remained open without offering services to visitors, but damage was reported and trash bins overflowed.
For how long?
The duration of a possible “closure” remains unknown at the moment, but Bernard Yaros estimates that it could extend up to two weeks, that is, a typical payment period in the United States.
“Pressure to resume government operations would increase rapidly as federal employees lose their paychecks and fear they will not be able to receive another one,” he added. The longest shutdown in US history lasted 34 days, in December 2018 and January 2019, under President Donald Trump.
What economic impact?
“Shutdowns have been shown to have an impact on the US economy, reducing growth by around 0.2 percentage points once the effects on the private sector are taken into account,” explained Thibault Denamiel, a researcher at the think tank American Center for Strategic and International Studies (CSIS).
“The simple fact of having to prepare for a ‘shutdown’ implies costs,” especially for “the taxpayer,” stressed Shai Akabas. Markets aren’t typically affected much by a shutdown, but analysts might wonder if it’s a warning sign from the new administration, added David Wessel of the Brookings Institution.
Source: BFM TV
