The government shut down at midnight on Tuesday after Republicans refused to give up their effort to repeal or delay Obamacare. That means nearly 800,000 people woke up this morning without a job to go to. The rest of the country woke up, too, wondering what happened overnight and how we wound up with a government in shutdown.
Here’s a rundown of what you need to know:
How We Got Here
The effort to block business as usual began back in 2010, when Republicans started using the country’s debt limit as a bargaining chip to try to get spending reductions. That same year, without bipartisan consensus on a budget, Congress had to pass something called a “continuing resolution” that funds the government for a short period of time at existing levels, but doesn’t manage long-term budgetary concerns, or create a real spending strategy. Continuing resolutions, rather than real budgets, have been passed ever since. In 2011, Republicans once again tried to hold the debt limit hostage, saying they would not approve an increase in the nation’s borrowing power unless the government first passed spending cuts. Lawmakers cut a deal which eventually triggered sequestration — across-the-board cuts on all federal programs — and closed head start programs for kids and cut back other vital services.
On Monday, just hours before a shutdown, the GOP refused to pass a 6-week continuing resolution that did not roll back the Affordable Care Act — a law they voted to repeal 43 times.
Everyone will be affected by the shutdown in some way. In terms of direct impact, federal employees — about 800,000 of them who aren’t considered “essential personnel” — will have it worst, since they’re not able to work or get paid during a shutdown. For some perspective, 97 percent of NASA and 94 percent of the Environmental Protection Agency are considered nonessential. Several other programs will also bear the brunt of the shutdown. Here’s ThinkProgress’s list from earlier in the week:
FINANCIAL SERVICES. The Small Business Administration will stop making loans, federal home loan guarantees will likely go on hold, and students applying for financial aid could also see delays and backlogs in applications.
HEALTH CARE. The National Institutes of Health will stop accepting new patients and delay or stop clinical trials. Medicare and the Veterans administration will continue paying out benefits, but new filers could face delays and doctors and hospitals may also have to wait for reimbursements.
PUBLIC SAFETY. The Environmental Protection Agency would stop reviewing environmental impact statements and food inspectors would stop conducting workplace inspections unless there is an imminent danger. The Bureau of Alcohol, Tobacco, and Firearms could stop processing applications for permits.
SECURITY AND TRAVEL. The Department of Homeland Security would suspend the E-Verify program, which helps businesses determine the eligibility of employees, creating hiring delays. The State Department will also likely halt new passport and visa applications.
DISASTER RELIEF. In preparation for a potential shutdown, the Utah National Guard is holding off on sending a team to help rebuild areas in Colorado devastated by massive floods last week. More National Guard engineers are desperately needed to repair major roads and bridges in Colorado. Roughly 240 Colorado National Guardsmen currently working on flood missions are also in danger of losing funding.
NUTRITION FOR WOMEN AND CHILDREN. Though food stamps will still be available in the event of a shutdown, the Women, Infants, and Children (WIC) nutrition program, a service meant to help new and expecting mothers and their young children get nutritious foods, will not. If a shutdown lasts for more than a few days, the roughly 9 million Americans who rely on WIC could see their assistance dry up, leaving them food-insecure.
If a shutdown lasts long enough, though, other programs could start feeling the hurt. In a fact sheet for troops and veterans released Monday, the Iraq and Afghanistan Veterans of American advised veterans that “VA benefits are protected and should go out during a shutdown. However, the VA recently announced that if the shutdown lasts longer than 2-3 weeks, the VA might not have enough cash on hand to pay benefits in November.”
What’s The Cost
There’s no great way to estimate what the economic costs of the shutdown will be, but economists say the outlook isn’t good. Shutdowns not only take money out of the economy, they also are a blow to consumer confidence and the stock market. ThinkProgress rounded up some of the latest numbers on what a shutdown could mean on Monday:
- A shutdown that lasted between three and four week could cost the economy about $55 billion, by the estimate of Moody’s Analytics economist Brian Kessler.
- Washington, DC, would lose $200 million a day on lost wages and lost spending by those who get furloughed. That estimate doesn’t include tourism, and the huge losses DC will feel from the museums and national mall being closed.
- The shutdown would “reduce federal spending” by about $8 billion, which could reduce GDP growth by .8 percent annualized, according to a report released Monday by Goldman Sachs.
- Moody’s Analytics’ Mark Zandi pegs the amount lost in economic growth in the fourth quarter at as much as 1.4 percent.
- One billion dollars a week from the pay of the roughly 800,000 federal employees will be lost from the U.S. economy.
There are other, more subtle economic costs too. With federal agencies shut down, the Small Business Administration and the EPA will stop issuing loans and permits, respectively, which slows down the growth of businesses.
The Senate voted 54-46 to reject a motion to go to conference with the House and Senate Majority Leader Harry Reid (D-NV) insists that he will only accept six-week funding bill without Obamacare provisions.
The longest shutdown in US history was 21 days, though most shutdowns have lasted three days. Republicans have indicated that they will negotiate a deal over the debt limit when the United States reaches it on October 17.