Here’s What Would Happen If There’s a Government Shutdown in December

(Bloomberg) -- A government shutdown sparked by a fight between President Donald Trump and Democrats over his demand for a border wall would have a smaller impact than others in recent years.

Congress and Trump previously approved funding bills for three quarters of the $1.2 trillion in operating expenses for federal agencies. As a result, only some agencies would be closed when funding runs out after Dec. 21, and even in those essential employees would still report to work.

Among those facing a partial shutdown are the Homeland Security Department, though many of the agency’s law enforcement agents will remain on the job because they’re considered essential. National parks would remain open but most employees who maintain them would be sent home. The Securities and Exchange Commission would halt new investigations except where needed “for the protection of property.” The Defense Department is funded and would operate normally.

An estimated 400,000 federal employees would work without pay and 350,000 would be furloughed, according to a congressional Democratic aide. The essential employees who work during a shutdown are paid retroactively when the government reopens and payroll operations resume. After previous shutdowns, Congress also has passed legislation to retroactively pay furloughed workers.

The 16-day full government shutdown in October 2013 cost the economy $24 billion, according to Standard and Poor’s.

Trump has been threatening a shutdown for months over his demand to fully fund a wall on the U.S.-Mexico border that he’s been seeking since the 2016 presidential campaign. He wants far more money than Democrats and even some Republicans have been willing to give him.

Trump met Tuesday at the White House with House Democratic Leader Nancy Pelosi, and Chuck Schumer, the top Democratic senator, and declared: “I will be the one to shut it down” if he doesn’t get the funding he wants for border security. “And I am proud to shut down the government for border security, Chuck.”

Lawmakers from both parties have been negotiating and appear willing to cut deals to win bipartisan support. But they say it’s unclear whether any agreements that fall short of Trump’s demands will cause him to veto the legislation.

Temporary Funding

A shutdown could be averted next week if lawmakers and the president agree to another short-term funding bill -- that could last into January -- or reach some kind of deal that allows all sides to claim victory.

Some Senate Democratic votes are needed to pass spending bills, even though Republicans hold a majority in the chamber. Because Trump has made shutdown threats in the past and backed down, Democrats say they have the upper hand.

Schumer and Pelosi said they made to two offers to Trump. Both would keep funding for border fencing -- not the concrete wall Trump wants -- at the current level of $1.375 billion. Trump has said he wants $5 billion to build a border wall.

Both Schumer and Pelosi are under pressure from Democrats and groups that support them not to compromise. In the House, more liberal Democrats are urging Pelosi not to compromise after the party won control of the chamber in Nov. 6 elections. Pelosi also has incentive not to compromise: She’ll will need those lawmakers’ votes in her bid to return as speaker when Democrats take over in January.

Economic Impact

Pelosi warned that even a limited shutdown could hurt the economy. “The Trump shutdown is something that can be avoided, that the American people do not need at this time of economic uncertainty, people losing jobs, the market in a mood and the rest,” Pelosi told reporters after meeting with Trump.

The spending bills already passed by Congress and signed by Trump will keep some departments operating, including Defense, Labor, Health and Human Services, and Education.

At the Department of Homeland Security, the overwhelming majority of border patrol, emergency management and immigration enforcement staff would be able to keep doing their jobs, though with their pay delayed.

At the Department of Housing and Urban Development, on the other hand, 87 percent of the agency’s 7,800 employees would be sent home. The Treasury Department is among agencies that would furlough workers. Its biggest component is the Internal Revenue Service and most of its employees wouldn’t report to work because it’s not tax season. Environmental Protection Agency employees would also be furloughed.

The Food and Drug Administration, whose funding would expire, says it would “continue vital activities,” while stopping routine inspections of pharmaceutical and food plants. The State Department would keep issuing passports -- unless the office in question is inside a building run by another agency and that agency gets shut down.

(An earlier version of this story corrected the name of the Department of Housing and Urban Development.)

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Laura Litvan in Washington at llitvan@bloomberg.net;Christopher Flavelle in Washington at cflavelle@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Justin Blum, Mike Dorning

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