Government Shutdown

What Could Cause a Government Shutdown and What Is the Debt Ceiling?

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The White House is preparing for a possible government shutdown as leaders struggle to pass a budget by the end of this month.

Every year, Congress must approve a federal budget that will finance the government for the upcoming 12 months. It consists of 12 appropriations bills, one for each Appropriations subcommittee.

The federal government's fiscal calendar runs from Oct. 1 to Sept. 30, meaning a shutdown will happen if lawmakers don't pass a budget by the end of September.

What causes a government shutdown?

A government shutdown is the result of leaders disagreeing over how much to spend on future bills.

Democrats and Republicans often hit gridlock when either party tries to include amendments or partisan priorities into a budgetary bill.

If they don't have a budget in place by the beginning of October, the government is required to reduce agency activities and halt non-essential operations.

Government shutdowns have happened several times over the last 10 years, most recently occurring twice under former President Donald Trump.

Which agencies could close if the government shuts down?

Most federal government agencies and programs rely on annual funding appropriations passed by Congress.

Although many programs are exempt, the public is still likely to feel the impact of a government shutdown.

In a full shutdown, the following agencies would be impacted:

  • Social Security and Medicare: Checks will still be sent out, however, benefit verification and card issuance would stop.
  • Internal Revenue Service (IRS): The IRS would not be able to provide its normal service of verifying income and Social Security numbers.
  • Health and Human Services: The National Institutes of Health (NIH) would be prevented from admitting new patients or processing grant applications.
  • Supplemental Nutrition Assistance Program (SNAP)
  • Transportation Security Administration (TSA): In a prior shutdown, long lines plagued air travelers as some TSA agents didn't show up for work because they were not being paid.
  • Environmental Protection Agency
  • Food and Drug Administration
  • National Parks

Essential services, including border protection, in-hospital medical care, air traffic control, law enforcement, and power grid maintenance would continue to operate.

What is the US debt ceiling?

The debt ceiling is the amount of debt the U.S. government is legally allowed to carry.

Congress can either vote to increase the borrowing limit to a certain dollar amount or suspend it until a certain date when the ceiling would be imposed at whatever level the debt is on that day.

Here's the problem: The debt ceiling prevents the U.S. government from honoring spending that has already occurred. Increasing or suspending the debt ceiling does not authorize new federal spending but allows the Treasury to continue to pay receipts for purchases the government made weeks or months ago.

How much is the US debt limit?

The cap is now $28.4 trillion. During the Trump administration, the debt limit was suspended three times. The last suspension — passed on a bipartisan basis in 2019, when the debt stood at $22 trillion — ended in July.

Since then, the Treasury Department has been engaging in what it calls extraordinary measures to keep the government operating.

The Associated Press, CNBC, NBC Washington
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