As the President and Congress continue to do battle over the federal budget, the possibility of a government shutdown looms if an agreement cannot be reached. That’s because government agencies need government resources to function. Since the current budget expires on September 30, these agencies would not be funded until a new budget was agreed upon.
Budgeting is the best way to reflect priorities, and it’s clear that both sides have different priorities when it comes to governing the country. While there’s nothing new about the executive and legislative branches fighting over the budget, there are larger differences and strong dialogue between the two sides this time around.
How Will This All Play Out?
Well, there are three scenarios:
- Federal budget passed – This means a deal will be reached by the President and Congress, and both branches will approve a budget to fund the government for the 2014 fiscal year from October 2013 – September 2014.
- Continuing resolution passed – The budgetary equivalent of punting, or kicking the can down the road. This would mean the two sides would agree to a temporary budget that allows them to keep the government funded while they seek a permanent solution. Continuing resolutions have an expiration date and may have conditions to raise or lower the overall funding levels.
- No agreement or continuing resolution is passed – The two-sided failing to reach even a temporary deal would effectively cause the U.S. federal government to shut down.
This doesn’t mean anarchy. There are “essential” services that would remain in operation even if a government shutdown were to occur. According to Forbes, essential services include national defense, benefit payments (i.e. Social Security), law enforcement, border patrol, health and safety inspections, air traffic control, disaster relief, energy production, financial management and tax collection.
But just because critical government functions are exempt doesn’t mean you shouldn’t be concerned about the potential of a government shutdown. According to ABC News and Forbes, here’s what could happen if a deal is not reached by September 30:
- National parks closed – Hope you weren’t planning on visiting any of our country’s beautiful national parks, monuments or museums after September 30 if our elected officials can’t agree to a budget plan. All federally-run national parks would not have operating funds to stay open and would have to temporarily close their doors. This could impact over seven million visitors and cost surrounding communities over $14 million in tourist revenue.
- Small business loans halted – Since the Small Business Administration is considered non-essential, loans for small businesses looking to grow and expand would be put on hold until a deal is reached.
- Travel visas and passports not processed – If you’re planning an international trip to or from the United States for the first time, you might want to keep a close eye on the goings-on in Washington. Back in 1995 when the government shut down, tens of thousands of international travel visas and hundreds of thousands of passport applications were put on hold until a settlement was reached.
- Medical research interrupted – In the event of a government shutdown, the National Institute of Health would have to suspend clinical trials and federally-funded government research would temporarily halt.
In the winter of 1995, when the federal government shut down for a total of 28 days, the executive branch’s Office of Management and Budget estimated that the shutdown cost taxpayers around $2 billion (adjusted for today’s inflation), according to the Washington Post. This includes the money it cost to reopen government facilities and some of the lost revenue that could have been collected.
In addition to the financial costs, the effects of a budgetary stalemate in Washington and a shutdown of the federal government could undermine confidence in the U.S. government and negatively impact public perception and approval ratings.
Here’s hoping our elected officials can come together and figure out a solution before the Monday deadline.