A government shutdown is just hours away and legislators are arguing to come up with a plan. Unless Congress agrees on a measure, the shutdown takes effect at 12:01 a.m. Saturday.
Each year, Congress must pass a spending bill to keep the government running. This is supposed to to happen by October 1st. Now, after continuous solutions, Friday is the new deadline. They have two measures failed already.
Experts from EY say entrepreneur that a government shutdown could leave “a visible mark on the economy.”
“We estimate that each week of the government shutdown will cost the US economy $6 billion,” says EY chief economist Gregory Daco.
What services will be affected by a government shutdown?
A government shutdown would halt the activities of most government agencies, including the IRS. Although TSA officers and active duty military will have their pay delayed, they will remain on duty, CBS reports.
National Parks and Smithsonian museums would be closed– just in time for the holidays.
How does the government shutdown affect the US economy?
A very short shutdown would have a “negligible impact” on the economy, although it increases significantly over time.
On an annualized basis, a one-week furlough would cut $6 billion, or 0.1% off real GDP growth in the fourth quarter (although furloughed workers are always paid retroactively), Daco says.
“The 35-day government shutdown at the beginning of 2019 led to increased policy uncertainty,” he added.
What services are not affected by a government shutdown?
Air traffic controllers, food safety inspectors, the armed services and the US Postal Service will not be affected. These services have separate funding, as is Fed.
How many government shutdowns have there been?
There have been 20 closures, with the longest 35 days between December 2018 and January 2019. In that time, 375,000 federal government workers were laid off and another 425,000 workers were asked to work without pay, according to EY data.