WASHINGTON, Oct. 23 (Xinhua) -- The U.S. federal government shutdown, which started on Oct. 1, has entered its fourth week, forcing hundreds of thousands of federal employees to work unpaid and disrupting a wide range of public services across the country.
As the shutdown drags on, the economic fallout intensifies, with mounting disruptions to government services, growing financial strain on federal workers, and increasing uncertainty for businesses and investors relying on timely data and government operations.
PARTISAN STALEMATE BLOCKS SPENDING DEAL
Under the Antideficiency Act, U.S. federal agencies cannot spend or obligate any money without an appropriation from Congress. When Congress fails to enact the 12 annual appropriation bills, federal agencies must cease all non-essential functions until Congress acts. This is known as a government shutdown.
The latest shutdown started hours after the U.S. Senate failed to pass a short-term spending bill that would have temporarily kept the government running. The continuing resolution proposed by Senate Republicans was blocked by Democrats, falling short of the 60 votes required for passage.
Healthcare benefits have been the central point between the two parties. The Democratic Party has demanded the extension of the enhanced subsidies under the Affordable Care Act set to expire at the end of this year, and the reversal of the cuts to federal Medicaid funding that Congress previously enacted in the "One Big Beautiful" tax and spending bill.
It also insists that any agreement must address its demands regarding healthcare benefits. The Republican Party, meanwhile, advocates passing a short-term funding bill at existing levels to keep the government running, allowing more time for negotiations. Both parties introduced their own versions of the bill, but neither secured enough Senate votes to pass it.
Some analysts believe that, with the three branches of power -- the White House, Congress and the Supreme Court -- all controlled by Republicans, the Democrats view the shutdown fight as an opportunity to push their policy agenda and consolidate party solidarity.
"In March, the Democrats suffered a serious drop in support from their own ranks when they did not fight harder, including accepting a shutdown," Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua.
"Even if Democrats gain very little from the current shutdown in policy terms, they will have proven that they are not a doormat, which is important to them internally," Ramsay said.
PUBLIC SERVICES AFFECTED, WORKERS FURLOUGHED
The shutdown forced the suspension of a broad range of government operations. National parks, museums, and federal offices were closed, while many public employees were placed on unpaid leave. Essential services such as air traffic control and border security continued, but employees were required to work without immediate pay.
According to USA Today, nearly 750,000 federal employees have been furloughed and ordered not to report to work. Others, including military personnel and air traffic controllers, are required to continue working without pay until a budget deal is reached.
Amid rising food prices and high mortgage costs, the inability to receive timely paychecks has placed significant financial pressure on many federal workers. On Oct. 15, the nonprofit Capital Area Food Bank announced that it would provide new food distributions for affected federal employees and contractors.
Beyond delayed paychecks, some federal employees risk losing back pay or even their jobs. On Oct. 7, U.S. President Donald Trump said that federal employees furloughed due to the shutdown might not receive back pay. On Oct. 10, over 4,000 federal employees received layoff notices.
Among "essential" federal employees, such as air traffic controllers and transportation security officers, absenteeism rates are higher than usual, contributing to flight delays, cancellations and longer security screening times. U.S. Transportation Secretary Sean Duffy recently said that staffing shortages among air traffic controllers have caused 53 percent of flight delays, compared with just 5 percent under normal circumstances.
Taxpayer services are contracting after the Internal Revenue Service furloughed nearly half its staff when carryover funds ran out. Roughly 34,000 employees were sent home in the second week of the shutdown, while about 40,000 remain on duty preparing for next year's filing season and implementing Trump's new tax law, Bloomberg reported.
Some national parks are open but with bare-bones staffing and limited sanitation services, with the impact varying state by state. Cooperative agreements with state governments can keep some parks open using non-federal funds, but others will be closed completely, said the report.
Another closely watched impact is the delay of important economic data releases. The Consumer Price Index (CPI) data, originally scheduled for release on Oct. 15, was delayed by nine days due to the shutdown. In an analysis, J.P. Morgan Wealth Management noted that policymakers and investors rely heavily on the CPI and other federal data sources for decision-making, and delays in the monthly report could increase uncertainty.
ECONOMIC FALLOUT LOOMS
While previous shutdowns have caused temporary disruptions, this one may have deeper, lasting effects due to potential job cuts and shifts in government priorities under the Trump administration. Experts warned that as the shutdown extends, it risks reducing gross domestic product (GDP) growth and could create broader challenges for the labor market and consumer spending.
"Each week, a shutdown subtracts about 0.1 percent from annualized GDP growth via reduced government activity. There could be a sentiment channel as well if the duration of the shutdown enters uncharted territory," said Michael Feroli, chief U.S. economist at J.P. Morgan.
Treasury Secretary Scott Bessent told Fox News earlier this month that the shutdown is starting to affect the real economy. "We believe that the shutdown may start costing the U.S. economy up to 15 billion (U.S.) dollars a day," Bessent said. The Treasury Department later clarified that he had meant 15 billion dollars a week.
According to Oxford Economics, the shutdown will trim between 0.1 and 0.2 percentage points off annual growth in economic output for each week it drags on. That amounts to between 7.6 billion and 15.2 billion dollars a week based on the hours that government employees aren't working.
The previous shutdown, which lasted 35 days from December 2018 to January 2019, caused an unrecoverable 3 billion-dollar hit to economic growth, with some private businesses permanently losing income, according to a Congressional Budget Office estimate.
The U.S. government has experienced 15 shutdowns since 1980. Triggered by Democrats' opposition to Trump's proposed funding for the U.S.-Mexico border wall, the 35-day shutdown, the longest in U.S. history, forced some 800,000 federal employees to work without pay or take unpaid leave.
What makes this shutdown different from previous ones is that the Trump administration has signaled its willingness to use it as an opportunity to cut government jobs and programs that do not align with Trump's priorities, rather than simply furloughing employees or requiring them to work without pay.
"The impact could be worse this time due to the threatened layoffs and actual job loss, which could create risks for the labor market and consumer spending," said Feroli. Enditem
京公网安备 11010802027341号