How a Government Shutdown Could Affect You

The U.S. is likely headed for a full government shutdown as Congress has so far failed to agree funding for the federal government beyond midnight on Thursday, September 30.

On Monday, Senate Republicans blocked a bill passed by the House of Representatives that would have provided funding—because it also raised the debt ceiling, which has become a focus of partisan division. An agreement to avert a shutdown could still be reached.

The last shutdown was only partial but it was the longest in U.S. history, running from December 21, 2018, to January 25, 2019. As Congress has not yet passed any funding bill, this would be a full shutdown.

Although each shutdown is different, a nonprofit called the Committee for a Responsible Federal Budget (CRFB) has published a paper providing some insights into what might happen.

Treasury Secretary Janet Yellen warned on Tuesday that a shutdown could lead to delays in Social Security payments and a rise in interest rates on car loans, credit cards and mortgages. She also cautioned about a potential U.S. debt default.

Here is an overview of how a government shutdown could affect you.

Federal Workers Furloughed

If no agreement is reached by midnight on Thursday, hundreds of thousands of non-essential federal employees will be furloughed without pay. During the 2018-19 shutdown, some 800,000 federal workers were sent home and missed two paychecks during the 35-day crisis. A similar situation this year would naturally create financial difficulties and distress for furloughed employees.

Essential Services Will Continue

Government services that are deemed essential would continue during a shutdown. These include air traffic control, law enforcement, border protection, medical care in hospitals and maintenance of the power grid.

During the last shutdown, however, airline passengers experienced delays because some air traffic controllers and Transportation Security Administration agents were working without pay.

Medicare and Social Security Checks

Medicare, Medicaid and Social Security are mandatory spending, so payments will still be made during a government shutdown. However, other services such as benefit verification and card issuing would stop, according to the CRFB. This could be a problem for some people, as benefit verification can be a requirement when applying for loans or mortgages, as well as services that require proof of income.

Food Stamps Threatened

A government shutdown could affect the 42 million people who receive food stamps under the Supplemental Nutrition Assistance Program. While funding for SNAP is mandatory, the Department of Agriculture has previously only been authorized to issue food stamps for 30 days in a shutdown.

Additionally, stores would not be able to renew their Electronic Benefit Transfer card licenses during a shutdown. If those licenses expire, the stores will not be able to accept SNAP benefits.

Backlog in Mortgage and Loan Applications

In the event of a shutdown, the Internal Revenue Service would not be able to carry out its usual activities of verifying income and Social Security numbers. This led to a backlog in mortgage and loan applications in 2018-19. Tax refunds were delayed too. As Yellen warned on Tuesday, a shutdown could also lead to higher interest rates on loans and mortgages.

National Parks Closed

You may not be able to visit your favorite National Park during the government shutdown. The parks that did remain open during the 2018-19 shutdown did not offer visitor services. In addition to an estimated $500 million in lost revenue, some parks reported a build-up of trash.

Food Inspections Could Cease

During the last government shutdown, the Environmental Protection Agency and the Food and Drug Administration (FDA) were forced to delay inspections. The postponed EPA inspections included drinking water facilities and hazardous waste sites.

COVID-19 and the National Debt

If no deal is reached, the federal government will shut down despite the COVID-19 pandemic. No shutdown has ever taken place in such circumstances before and it's not clear how it would affect the government's response.

The Centers for Disease Control and Prevention will continue its work on COVID-19 but, according to the agency's shutdown plan, 62 percent of CDC employees could be furloughed. The FDA will continue to authorize vaccines and therapeutics.

Another concern is the national debt. If Congress cannot agree to raise the ceiling, the U.S. could default on its debt with potentially catastrophic effects on the economy. A debt default could also spark a global recession. The treasury secretary warned on Tuesday that the U.S. might not be able to fulfil its commitments if an agreement is not reached by October 18.

View of the Capitol as Shutdown Looms
A view of the U.S. Capitol on the evening of Tuesday, September 28. A full government shutdown will begin if Congress cannot reach agreement by Thursday at midnight. Drew Angerer/Getty Images