Federal Government Shutdown 2023: If legislators fail to approve legislation funding the federal government by September 30, 2023, there will be a government shutdown. It appears that a government suspension will occur on October 1, 2023, as Congress is not expected to pass the 12 appropriations measures that fund government operations before the start of the next fiscal year.
Federal Government Shutdown 2023:
A Federal Government Shutdown occurs when non-essential U.S. government offices are unable to continue operating due to a lack of funding. When the federal budget that will fund the government for the upcoming fiscal year is delayed, money shortages are frequently the result. Until funding legislation is passed, the closure remains in effect.
A government closure will result in the suspension of numerous programs supported by public funds. Some businesses may continue to operate while depleting their cash reserves, but they will also cease operations if these funds are exhausted. The term “government shutdown” is commonly used to refer to the federal government, but it can also occur at the state, territorial, or municipal level.
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Why did the 2023 Government Shutdown occur?
Under the Antideficiency Act (originally enacted in 1884 and revised in 1950), federal agencies are prohibited from incurring debt or making expenditures. If Congress fails to approve the 12 annual funding bills, federal agencies must cease all non-essential operations before they may resume them. Currently, the government is closed.
In the event that some but not all of the 12 appropriations bills are passed by Congress, only the agencies lacking funds must close down; this is known as a partial closure.
How frequently do government shutdowns occur?
The duration of four shutdowns exceeded one business day. President Clinton and the Republican Congress disagreed on expenditure levels in 1995-1996, resulting in two 26-day government shutdowns. In 2013, the Affordable Care Act funding dispute resulted in a 16-day closure. In December 2018 and January 2019, a border wall funding dispute led to a 35-day partial government shutdown, despite the fact that five of the 12 authorization measures had already been approved by Congress.
What occurs if this occurs?
Numerous federal employees are instructed not to work during shutdowns, despite the fact that a 2019 law would provide them with retroactive pay. Law enforcement and air traffic controllers are government employees who will not be compensated until Congress ends the partial closure. This represents only 25% of annual congressionally authorized federal expenditures.
During a closure, Social Security benefit offices may limit their services, but Social Security and Medicare are authorized by Congress via legislation that does not require annual authorization. Treasury may also make timely interest payments on US Treasury debt.
What about the judiciary and the legislature?
According to the Administrative Office of the U.S. Courts, during a government closure, courts use earned fees in lieu of appropriations and delay new hiring, non-case-related travel, etc. The courts have determined that they may continue a constitutionally protected activity if the closure continues for an extended period of time and those funds are utilized.
Congressmen cannot be granted furloughs, according to the Congressional Research Service, due to their constitutional duties and fixed salary allocations. Only congressional staff “required to support Congress with its constitutional responsibilities or those necessary to protect life and property” are permitted to operate. Even if they are paid retroactively, legislative staff are not compensated during government shutdowns.
Why does a government shutdown in the autumn of 2023 appear likely?
With Republican support, Congress and President Biden passed and signed the Fiscal Responsibility Act in June 2023, increasing the federal debt ceiling and limiting defense and non-defense spending for fiscal years 2024 (beginning October 1, 2023) and 2025. Congress was expected to approve 12 measures utilizing the agreed-upon budget. The twelve measures were unanimously approved by the Senate Appropriations Committee. The compromise dissatisfied the House Republicans.
What exactly is an ongoing resolution?
The GAO identified 47 “CRs” for the Beltway between 2010 and 2022. Six months are few in comparison to the days. Although they keep the government operating, the GAO says they can be difficult for federal agencies to manage because they must frequently prepare for a closure because they cannot be certain a CR will pass, they can disrupt recruitment efforts, and they make planning challenging.
If the House adopts an autumn continuing resolution, a government closure could be avoided.
A distinctive provision of the Fiscal Responsibility Act prohibits Congress from financing the government beyond December 2023. On January 1, 2024, a CR would undoubtedly reduce military expenditure significantly.
How do government shutdowns affect the economy as a whole?
A few-day shutdown is inconvenient and erodes public confidence in the capacity of U.S. lawmakers to transact the people’s business, but it rarely affects the economy. A prolonged outage may cause temporary but significant problems. According to Goldman Sachs, a government closure would reduce weekly GDP growth by 0.2 percentage points and increase quarterly growth by the same amount.
