(Bloomberg) -- Will the U.S. government shut down for lack of money, and if so, what doors actually close? How did we get here, and which party might be blamed? With elected leaders in Washington running out of ideas for keeping the federal government funded, and a midnight deadline fast approaching, Americans might want to start reacquainting themselves with the details of government shutdowns.
1. What are the chances the government shuts down?
Over the course of months, it’s gone from a far-out possibility to an imminent headache. With members of Congress still in session, and President Donald Trump down the avenue in the White House, there’s always the chance for a last-minute deal that at least postpones a shutdown for a few days or weeks. But the countdown clocks running on cable-news channels -- ticking down until midnight Washington -- testify to the fact that time is running out.
2. What needs to happen to avert a shutdown?
A simple majority of House members, and a supermajority of 60 senators, would need to get behind some funding measure -- called a continuing resolution -- that Trump would be willing to sign. That means Republicans can pass a measure on their own in the House -- as they’ve done already -- but need Democratic support in the Senate, where they hold only 51 of 100 seats. Democratic senators, who have been cut out of much decision-making in the past year, are holding out for some of their priorities.
3. What are the sticking points?
There are several, tangled together. When Congress considers a must-pass piece of legislation such as this one, both parties try to insert their top priorities in it. For Senate Democrats, that’s permanent protection from deportation for about 700,000 so-called Dreamers -- undocumented immigrants who were brought to the U.S. as children and protected under the Obama-era Deferred Action for Childhood Arrivals program. Republicans want to combine that with $18 billion for border security, including work on the Mexico border wall that Trump has long promised, plus some limits on other immigration programs. To lure Senate Democrats, Republican leaders had agreed to extend for six years the Children’s Health Insurance Program, whose funds they let lapse last year. But Trump muddied those waters by tweeting that CHIP money shouldn’t be in the temporary-funding bill, before the White House backtracked. For defense hawks, the question is whether the bill increases defense spending -- without also increasing spending on social-welfare programs.
4. What does a shutdown mean?
It means many, though not all, federal government functions are suspended, and many, though not all, federal employees are furloughed. Services that the government deems "essential," such as those related to law enforcement and public safety, continue. But defining "essential" is more art than science, with individual government departments -- and the political appointees who run them -- having a say over who comes to work and who stays home. So many details are still to come, probably on Monday, if a shutdown continues until the work week begins. In theory at least, a federal employee who works during a shutdown, but isn’t supposed to, could face fines or a prison term under what’s called the Antideficiency Act.
5. What government services would cease?
The ones that draw headlines are those that produce closures of national park facilities and the Smithsonian museums in Washington and delays in processing applications for passports and visas, though the Trump administration is intent on easing those effects. Economic reports from the Labor and Commerce departments could be delayed, depending on how long a shutdown lasts. Tax audits, oversight of financial swap markets and investigations of workplace civil-rights complaints are among activities expected to stop.
6. Which government functions would be unaffected?
Military operations, air traffic control, medical care of veterans and federal criminal investigations -- including a certain probe of the president’s inner circle -- are among the essential activities that will go on. The U.S. Postal Service and U.S. Federal Reserve have their own funding streams so will also be largely unaffected.
7. Who would get blamed for a shutdown?
Since they control Congress and the White House, Republicans might be expected to be most at risk from the appearance that Washington isn’t working correctly. But Republicans already are trying to explain a potential shutdown as being forced by Democrats in the Senate and their insistence on protecting those who immigrated illegally to the U.S. as children.
8. Would there be harm to the U.S. economy?
It depends on how long a shutdown lasts. Based on past shutdowns, something lasting a few days to a week is unlikely to have a sizable impact. A shutdown of several weeks could shave a few tenths of a percentage point from gross domestic product growth in a given quarter. Bloomberg economists estimate that a government shutdown that lasted two and a half weeks in 2013 subtracted 0.30 percentage point from quarterly GDP.
9. How many times has this happened?
There have been 12 shutdowns since 1981, ranging in duration from a single day to 21 days, according to the Congressional Research Service. (Before 1981, agencies operated mostly as normal during funding gaps, their expenses covered retroactively once a deal was reached.) Shutdowns over spending disagreements are different (and less grave) than what would happen if the U.S. breached its debt ceiling and defaulted on some of its obligations. That’s never happened -- though its specter, too, will grow if Congress doesn’t reach a deal in the next several weeks.
The Reference Shelf
- Congress lists all votes on appropriations for the 2018 fiscal year.
- The Committee for a Responsible Federal Budget tracks the budget through its Appropriations Watch.
- A 2015 report by the Democratic staff of the Joint Economic Committee of Congress examines the economic costs of shutdowns.
- A Congressional Research Service report on economic effects of the 2013 shutdown.
©2018 Bloomberg L.P.