Is the US Government About to Shut Down? What to Know

The U.S. government is facing the possibility of yet another shutdown, that threatens to disrupt the lives of thousands of Americans, over funding disagreements that have divided the House.

Right-wing GOP members of the House have pushed back against long-term government spending plans and appear to be resisting a short-term proposal that may avert a shutdown until the end of October.

On August 31, the White House asked Congress to approve a short-term continuing resolution (CR) that would keep government funding at current levels and avoid a partial shutdown by October 1.

The new CR would impose a nearly 8 percent cut on most federal agencies—with the key exception of defense and the Department of Veterans Affairs. Crucially, it doesn't include additional funding for Ukraine or disaster relief funds, which the White House had requested in August.

It has been backed by Republicans Byron Donalds of Florida, Dusty Johnson of South Dakota, Scott Perry of Pennsylvania, Stephanie Bice of Oklahoma, Chip Roy of Texas, and Kelly Armstrong of North Dakota.

House Republicans will be given a few days to vote for the plan, set to take place on Thursday. However, hardliners say they will not vote for it, risking a government shutdown.

MAGA members of the House GOP, however, seem to remain divided on what the terms of the continuing resolution to fund the government should be. On X, the platform previously known as Twitter, Representative Matt Gaetz of Florida laid out his demands of Speaker McCarthy.

"We want: Single-subject spending bills; A vote on term limits; A vote on a balanced budget amendment; Full release of J6 tapes; And stop spending money at COVID/Biden levels!" the congressman wrote. "Time is running out, [Speaker McCarthy]."

McCarthy's recent endorsement of an inquiry into President Joe Biden was widely thought to have been part of a concession to right-wing Republicans resisting current long-term spending plans.

Gaetz previously threatened McCarthy with daily motions to vacate him from the office of the Speaker should he not meet the demands of him and his allies, and further characterized his impeachment endorsement as merely "a baby step."

The CR is only a temporary solution as Congress and the White House continue to negotiate over longer-term appropriation bills. Of the 12 bills necessary to fund the government for the fiscal year, none has passed through Congress so far.

House Republicans have threatened to shut down the federal government if these 12 longer-term appropriation bills, which include defense, aren't passed by September 30. If they aren't passed, a shutdown will begin on October 1. This is what led to the CR proposal, to buy more time.

Hardline conservatives have pushed for bigger spending cuts that likely would not pass the Senate, while others like Representative Marjorie Taylor Greene said she would not vote to fund the government if President Joe Biden's impeachment is not part of the discussion.

The House GOP, led by Speaker Kevin McCarthy, could not reach a consensus on defense spending after a planned vote went awry last week and no procedural vote occurred.

Given the breach between the wishes of some hardline Republicans, the rest of the House GOP, Democrats, and the White House, it is difficult to imagine how a shutdown can be avoided.

What Does It Mean for You?

The instability caused by the threat of a government shutdown has already led ratings agency Fitch to downgrade the U.S. credit rating a notch below its top level.

Fitch blamed the demotion on a "steady deterioration in standards of governance over the last 20 years" which "have eroded confidence in fiscal management" in the world's largest economy.

Other effects will be more forensic. If the government shuts down, thousands of federal workers will have to stay at home. Federal employees furloughed won't get paid but usually get reimbursed when they return to work.

As stated by think tank Brookings, employees who provide essential services, such as law enforcement, will continue to work although they won't be paid until Congress ends the shutdown.

The last government shutdown—the longest in U.S. history—stretched for 35 days, from December 22, 2018, to January 25, 2019, over then President Donald Trump's demands for funding for a wall along the U.S. southern border to prevent illegal crossings from Mexico.

Social Security and Medicare will continue to be paid as they don't require annual approval. A shutdown may, however, lead to a halt on the issuance of new Social Security cards, which could affect thousands of Americans.

Other functioning may slow down, such as a delay in processing of applications for passports or government loans, and services at federal-run facilities such as museums and parks are likely to be suspended too.

The courts should be able to continue normal operations for at least a couple of weeks by relying on court fees and other funding that doesn't come from Congress, Sonja West, a law professor at the University of Georgia, recently told Newsweek via email.

But an extended shutdown would require the courts, she said, "to pare down their services to only those functions that are considered essential or critical to their mission," which equates to pausing services aside from those that fulfill constitutionally mandated duties.