The government shutdown concept literally refers to the shutdown of government offices because of a lack of funding. Most of the time, the main reason for this is the delays in the approval of the federal budget. This budget finances the upcoming fiscal year of the government.
The only way to end this process is to bypass the funding legislation. Unfortunately, all federal operations will stop during the government shutdown. Although the scale of the government shutdown may vary, the government shutdown in 2023 will be a comprehensive shutdown that will affect the entire federal government.
It is worth noting that all the nonessential government offices will not be open during this period. Federal employees who may have to keep working during this period will receive their pay in the future. In addition, benefits and unemployment payments provided to veterans will continue to be paid.
Depending on how long the government shutdown lasts, it will have devastating effects on the country’s overall economy. Below, you can learn more about the details of the government shutdown.
What Does It Mean When There Is a Government Shutdown?
Although this may be happening periodically in the United States, the slowing or stopping of government operations can also spread in the private sector. Without a doubt, this also leads the entire economy to lose money.
As a result, as a citizen, this means that we may suffer higher product and service prices in the long term. However, it is also important that this event in the government may have different long-term effects on the economy as well. For example, the government shutdown in 2013 lasted for 16 days, and the overall United States economy lost $24 billion.
Although this happens in the macro economy, local businesses are also affected by it. Particularly, companies that are serving federal workers, like restaurants, hotels, and hospitality services, may suffer a revenue decrease.
It is worth noting that the banks will not be controlled by the government during this time. They will not be able to process any loan applications since they cannot access any information. This is why if you have any operations at the bank, it may be a good time to handle them before the government shutdown.
This can lead to a great interruption in many industries, such as the real estate industry and the market. Unfortunately, the government shutdown‘s effects may be quite devastating for the overall economy and citizens. We hope that this government shutdown will not last as long as the previous ones.
Upcoming Congressional Fiscal Policy Deadlines
In this section, you can find more about the upcoming congressional fiscal policy deadlines. However, some experts believe that Congress may enact short-term extensions to buy some time for themselves to take action. interruption
Here are the upcoming congressional fiscal policy deadline dates together with their titles.
- Debt Limit – Summer 2023
- Statutory PAYGO – December 2022 or January 2023
- Major IRA Provisions – January 1, 2023
- Student Loan Executive Order – December 31, 2022
- Other Tax Phase-Outs & Expirations – December 31, 2022
- Medicare Physician Bonus Payments – December 31, 2022
- Medicare Radiation Oncology Rules – December 31, 2022
- Medicaid Assistance for Territories – December 13, 2022
- Public Health Emergency Declaration – October 13, 2022
- Livestock Mandatory Price Reporting – September 30, 2022
- Food & Drug Administration User Fee Programs – September 30, 2022
- Authorization of TANF & Related Programs Expires – September 30, 2022
- Maternal, Infant, and Early Childhood Home Visiting Expires – September 30, 2022
- National Flood Insurance Program Authorization Expires – September 30, 2022
- Funding the Government / Appropriations – September 30, 2022
Government Shutdown 2022
2022 is approaching, and the budget talks are still in process. The budgets for every agency as well as the military is undergoing and whether or not there might be a government shutdown in 2022 is still a question. After the government shutdown in December 2019, Americans are wondering if there will be another one coming and how it will affect the country.
The fiscal year the United States follows starts from October 1st of every year and ends on the last day of September, the following year. If Congress doesn’t pass the law to fund the government by October 1, the government shut down.
Possibility of a government shutdown in 2022
Just a few days are left for October 1, and the Congress hasn’t passed the bill to fund the federal government agencies. There is one thing that’s holding the Congress – or should say Democrats and Republicans – from passing the bill, and that is the debt ceiling. If both parties don’t come to an agreement, the government may shut down this week.
What is the debt ceiling?
The Treasury borrows money when it needs it. The amount of debt that can be incurred by the federal government has a limit though but since the Treasury doesn’t have a credit score on its own, there is a maximum debt amount. The limit is the debt ceiling. It gets in the way of the federal government borrowing a certain amount of money.
The debt ceiling is what the Republicans and Democrats are arguing over for the FY2022. While Democrats want to increase the debt ceiling, Republicans aren’t so keen on doing it. This disagreement between them looks like it’s going to be the reason why the budget bill won’t pass, and as a result, the federal agencies won’t have funds, thus, resulting in a government shutdown. If this were to happen, federal employees will be furloughed, and all agencies will stop functioning.
Whether or not the government shutdown will happen for the Fiscal Year 2022 is going to be clear in the upcoming days. Considering the economic damages of the pandemic, not a single federal employee favors a government shutdown, and both the Democrats and Republicans must agree to pass the budget bill to prevent further damage.