Thursday 3rd December 2020

Government shutdown by the numbers: From food stamps to wages, how Trump’s crusade is damaging the US economy

One month into the longest-ever funding impasse in modern American history, there is little evidence to suggest that Donald Trump and congressional Democrats will come together to end the government shutdown anytime soon.

Over the past 31 days, Washington politicians have squabbled as the impacts of the shutdown have piled up.

At first, it was the headlines noting that rubbish was piling up inside America’s national parks. Then came the threats to government services such as food stamps and housing subsidies. Now, hundreds of thousands of federal employees are struggling to make ends meet without their regular paychecks.


We’ve examined the impact of the shutdown by the numbers, and how it has impacted the broader US.

Government employees making do without income

Around 800,000 federal employees have been furloughed or told to come into work even though they are not being paid. That means that hundreds of thousands of people who live month to month have been forced to find ways to pay their mortgages, put food on the table and even pay for petrol to drive to the jobs they are not being paid to do

Nine departments impacted

The entire US government has not been shut down, but nine federal departments and agencies are feeling the squeeze.

Those which have been closed since funding ran out on 22 December include the Federal Aviation Administration, Environmental Protection Agency and the Securities and Exchange Commission. In closed agencies and departments, only employees considered “essential” have been told to come to work without pay until the shutdown ends.

The departments that have not been impacted include the Defence Department, which congress and Mr Trump had already funded until the end of the 2019 fiscal year.

Other agencies such as the US Federal Reserve and US Postal Service have managed because they rely on funding that comes separately from congress.

US economy slowing

The chairman of the White House Council of Economic Advisers, Kevin Hassett, has estimated that the shutdown has cut US economic output by about 0.13 per cent each week. That includes lost work from government contractors, as well as lost spending and investing by federal employees who don’t have money to spend without a paycheque.

Others have estimated a similar substantial risk for the shutdown, with New York Federal Reserve president John Williams saying the US economy could see a cut in economic growth by 1 per cent this year as a result of the shutdown.


Inspections are falling behind

Regulations, inspections, and government approvals are falling behind.

Since the shutdown came into effect in December, a number of services provided by the government have been curtailed.

That includes US food inspections – except in some instances where high risk has been involved – as well as government approval for things such as expanding airline fleets.

In addition, some fishing boats in Alaska have been docked because of the shutdown, the Securities and Exchange Commission cannot approve initial public offerings for companies, and safety inspections and reviews for new drugs may run out of funding.

Thirteen shutdowns since 1981

The US has seen 13 shutdowns since 1981, with many lasting just a short period of time. The previous record holder ran 21 days from December 1995 until January 1996.

These shutdowns are relevant here because, before 1981, government agencies continued to operate as normal and expenses were covered retroactively once the government was reopened.

Some 42,000 immigration court hearings cancelled or postponed

Mr Trump has demanded $5.7bn to fund the border wall he made a central campaign promise in 2016, citing a broken US immigration system that has allowed drugs and criminals to flow easily into the country.

But, the government shutdown is putting a greater burden on the system than before, and a Syracuse University estimate indicates that 42,000 immigration court hearings have been pushed back or cancelled.

The shutdown has had a ripple effect beyond just the government

The shutdown’s impact has been felt well beyond those in the federal workforce. Since the shutdown began, airlines have reported a dip in customers while major businesses have been hit, too.

Other, less obvious industries, have also been impacted: brewers, for example, have been unable to get government approval for labels on their new or seasonal products.

And consumers are beginning to take note, with the University of Michigan’s Consumer Sentiment Index falling in January to its lowest level since Mr Trump became president.

No end in sight

After several meetings between Mr Trump and congressional leaders such as speaker of the House Nancy Pelosi, the president offered on Saturday to strike a deal that would include the $5.7bn he has asked to build the wall, as well as temporary relief for so-called Dreamers through the Deferred Action for Childhood Arrivals policy that Mr Trump took steps to end after becoming president. But Democrats have appeared uninterested in striking that sort of deal, and have remained largely united in their opposition to giving the president border wall funding.

Notably, some Republicans have begun indicating that they are less interested in the president’s wall than they are in getting the government back up and running, with at least three in the Senate saying they want to vote on funding with or without wall provisions. That group has included Colorado senator Cory Gardner, Maine senator Susan Collins, and Alaska senator Lisa Murkowski. 

But Mr Trump has said he is willing to keep the shutdown running for months or even years. We’ll see how serious he is about that.

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Published On: January 21, 2019

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