What Happens if the Federal Government Shuts Down?

The federal government is poised to shutdown if a budget agreement cannot be reached by midnight on Oct. 1. Although a last-minute agreement may be reached, the possibility of a shutdown remains real. With discretionary government workers preparing for the possibility, this costs the government both in time and resources, further adding to the federal deficit and placing the dysfunction of the federal government on full display, for the entire world to watch. 

Much like how the United Auto Workers (UAW) strike is forcing American automobile manufacturers to shut down plants, the same can be said about the situation for federal agencies. Without a federal budget deal, this is akin to millions of federal workers involuntarily going on strike. In this case, the legislators who are creating the fiscal impasse are serving as de facto union leaders. 

The challenge being faced in the House of Representatives is that a group of hardline Republicans have attached spending cuts and conditions to the budget deal that would fund the government past September. The Senate put forward a bipartisan stopgap bill, which will likely not get the necessary votes in the House. 

So, what happens if the government shuts down?

All discretionary services and workers are furloughed. This means that reaching a person at numerous government agencies becomes nearly impossible.  

The laundry list of services affected is significant. Getting a passport could become problematic, especially if expedited services are needed. Air travel could slow down, as the addition of new air traffic controllers would effectively stall. Federal student loan payments, due to restart on Oct. 1 after a three-year pause, could be problematic to process. Federally backed housing loans may not get processed in a timely manner.

The key words in all such possibilities are “could” and “may not,” given that just 27% of government employees are now classified as discretionary and would be asked to stay home during a shutdown, while those considered “essential” would be asked to continue working without paychecks‚ including the entire military. In practice, this means that most government services remain intact, making a shutdown more like a speed bump than a full-scale crash landing.

This does not mean that government services and people will not be impacted. Many will. One must, however, look at the issue holistically to appreciate the limited impact that a short-term shutdown may have.

There is no financial savings when the government shuts down. As required under the 2019 Government Employee Fair Treatment Act federal government workers will eventually get paid for the period of the shutdown, including those who were not working (this does not apply to government contractors). So, the overall cost to taxpayers is even higher, with the possibility of overtime pay needed to catch up with the backlog of work that accumulated during the shutdown.

The bigger issue is not dealing with the threat of a government shutdown, which has occurred with great frequency over the past four decades. Today, it is the ongoing dysfunction and chaos in our legislative process that facilitate threats of government shutdowns.

What the federal government operates is an enormous human supply chain, with around 45% of the discretionary spending covering salaries and benefits for people providing services. With the federal budget representing around 25% of the gross domestic product, this represents a massive outlay of funds to keep this human supply chain intact.

With around 4 million government employees set to be furloughed, the net effect is a grinding down of the human supply chain.

The political stalemate that may bring the federal government to a halt is fueled by the massive dysfunction that permeates the federal government and how it operates. Party-driven extremism foments ineffective legislative games of chicken that ultimately get resolved, with no positive outcomes except delaying until the next fiscal deadline is reached. 

Is there a solution? 

With how budgets are debated and approved, there is no obvious path to avoid future threats of shutdowns.

What fuels the current antagonistic climate are the razor-thin majorities held in both the Republican-controlled House and Democratic-controlled Senate. This provides little room for error when votes must be cast. It also empowers those who seem to be the most vitriolic and toxic legislators to act out and push their extreme agenda on their fellow members in order to avoid or end a government shutdown.

This environment is a microcosm of the nation as a whole, as different factions mobilize around their special interests, gaining concessions that ultimately chip away at unity and create resentment. Such a “me first” mentality weakens our democracy, ultimately hurting everyone. Winning battles is futile when the war is being lost. 

Whether the government does indeed shut down on Oct. 1 is almost irrelevant at this point. What is more disturbing is that the House continues to traverse this destructive path, placing the well-being — and credibility — of the nation at risk. 

We are the United States of America. There is nothing that is happening in the House that suggests any type of unity. Expecting legislators from different parties to agree on most issues is unrealistically optimistic. Asking members of the same party to work together is reasonable, perhaps even expected. If this is not possible, then perhaps we need to identify and grow new parties or processes that can facilitate functional government and productive legislation. 

If Rep. Kevin McCarthy (R-Calif.), the Speaker of the House, cannot hold his party together and come up with sensible budget packages that can be approved in the Senate and signed into law by the president, perhaps the time has come for someone else to step forward who can achieve some semblance of unity. Without such a change, the future looks bleak until the next election resets who legislates in Congress.

In computer lingo, it is called a “Control-Alt-Delete,” and one is long overdue.

Sheldon H. Jacobson, Ph.D., is a founder professor in computer science at the University of Illinois Urbana-Champaign. A data scientist, he applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy.