The United States is teetering on the edge of a government shutdown due to a political deadlock in Congress, primarily driven by Republican calls for significant spending cuts. The impending crisis looms as the new US government fiscal year is set to commence on October 1. The Republican Party’s refusal to pass essential funding bills has raised concerns, with credit ratings agency Moody’s even suggesting that a shutdown could have a “credit negative” impact on US sovereign debt. Here’s a glimpse of what could transpire if the US government indeed shuts down:
In the unfortunate event of a stoppage , federal employees would be furloughed without receiving their paychecks. However, certain personnel, such as members of the military and other essential workers, would continue their duties without compensation. This scenario implies that nearly 1.8 million federal workers might face financial hardships, while approximately 850,000 non-essential workers could be placed on unpaid leave.
Essential operations, including air traffic control, border patrol, and hospital staff, would persist during a shutdown. Nevertheless, a wide range of services is likely to be adversely affected. This could include delays in processing new applications for Social Security and Medicare, disruptions in food and environmental site inspections, and potential closures of national parks.
The economic repercussions of a government shutdown are significant. According to estimates by Goldman Sachs, the shutdown could diminish economic growth by 0.2 percentage points for every week it continues. While some past funding lapses have been brief, the current political climate resembles the conditions that preceded longer shutdowns in history.
The shutdown would also disrupt the release of federal government data, posing a substantial concern for the US Federal Reserve. Without access to fresh data, the central bank would be compelled to make economic decisions without a comprehensive understanding of the country’s financial landscape.
During a shutdown, the President and members of Congress would continue their work and receive their salaries. The Supreme Court would remain unaffected in the short term. Additionally, the federal judiciary would function normally for at least the initial two weeks of October.
As the deadline approaches, the specter of a government shutdown casts uncertainty over various sectors and the broader economy. The repercussions could be far-reaching, affecting federal workers, essential services, and the nation’s economic stability.
For more updates stay tuned to FELA News!
Source: Hindustan Times
