On October 1st, 2023, the deadline for Congress to pass additional funding for several key governmental agencies will expire, which will cut funding and lead to a government shutdown. It could have the potential to disrupt the salaries for millions of federal employees.
Every year, Congress passes a dozen appropriation bills providing for federal agencies before the start of the new fiscal year on October 1st, collectively known as an “omnibus bill”. If these bills fail to pass before the October 1st deadline, agencies whose funding has not already been approved will shut down. The United States Department of Treasury cannot pay out agencies absent a Congressional appropriations bill approving it.
In an interview from Matt Glassman, a faculty member of the Government Affairs Institute at Georgetown University in DC with CBS News: “[The] treasury cannot pay out any money if there's not a law providing for who gets the money. If those annual bills expire, then there is no law appropriating money for certain functions.”
Typically, if a government shutdown is looming without the likelihood of a successful omnibus bill, Congress may pass a temporary funding extension, called a “continuing resolution” (CR) bill to avert a shutdown. In this case, a CR bill appears unlikely, which has been curtailed by Republican infighting in the House.
The cause of the delay in passing new appropriations bills for the 2023-2024 fiscal year can be attributed to the partisan differences between the Republican-majority House and Democratic-majority Senate. A financially conservative omnibus bill passed through the House would be dead on arrival in the Senate.
A successful omnibus bill for the 2023-2024 fiscal year must first make it through the divided GOP-dominated House, which has already threatened to oust Kevin McCarthy amid infighting between hard-right and moderate Republicans over spending cuts. It must also make it through the Democratic-dominated Senate, requiring an additional layer of compromise, before being signed into law by the President. Hard-right House republicans see the standoff as an opportunity to implement significant budget cuts.
In other words, an appropriations bill to avert a government shutdown must successfully make it through three rounds of compromise and formal approval, all in eight days.
The situation is made more dire with most House members leaving on Thursday for the weekend, who are not expected to return until Tuesday, placing another delay on the issue. Upon return, the federal government would have less than a week to avert the looming shutdown.
If a government shutdown occurs, all agencies must cease non-essential operations. The Antideficiency Act, created specifically for instances of government shutdowns, requires functions protecting human life and property, and those involved in constitutional procedures such as the President, cabinet, and Congress to continue operations. The president and Congress will remain on the payroll. The Antideficiency Act does not provide for the judiciary branch, but it can be expected to continue to operate from other sources of funding and court fees.
Currently, none of the twelve appropriations bills that provide for federal funding have been passed, meaning every agency will be affected to some degree. Active-duty military members, law enforcement, federal hospitals, and TSA workers will continue to work, and will be reimbursed for lost pay at the end of the shutdown. However, non-essential functions such as national parks or federally funded research will cease. The travel and tourism industry will be one of the most affected sectors, and according to the US Travel Industry Association, could lose $140 million for each day of the shutdown. Businesses relying on government contracts and customers may also experience layoffs.
Fortunately, the impact on daily life for the public is expected to be minimal. The president of the Committee for a Responsible Federal Budget, a non-profit public policy organization discussing federal fiscal matters, has said that the public may not even notice the effects.
Social services such as the Postal Service, Social Security, and Medicare and Medicaid will continue operating, as their funding is derived from permanent appropriations measures.
If a shutdown occurs, it could last for several weeks.
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