10/1/23

By Aditi Jha

Government shutdowns occur when Congress can't agree on the 30% of government spending they have to approve prior to October 1st, the start of each fiscal year. Federal agencies can't spend money without approval from Congress. When Congress doesn't pass the 12 annual bills setting levels of funding for a variety of agencies and programs, the agencies have to stop every non-essential activity, also known as a government shutdown. A partial shutdown is when Congress passes some but not all bills and only the agencies that don't have a set level of funding must shut down. There have been four shutdowns that took place for longer than a day. In 1995-1996, an agreement on spending levels was not able to be reached by President Clinton and the Republican Congress, resulting in a 26-day government shutdown. In 2013, funding for the Affordable Care Act was so controversial that the government shut down for 16 days. And a debate over border wall funding led to a 35-day partial shutdown in 2018-2019 (Congress passed 5/12 bills).  Congress stopped a government shutdown today by passing a stopgap spending bill that ensures funding until November 17th. It was signed into law by President Joe Biden just minutes before the government would have shut down. The bill doesn't include any new Ukraine aid, which was an essential request from Democrats. Biden released a statement declaring that "we cannot under any circumstances allow American support for Ukraine to be interrupted. I fully expect the Speaker will keep his commitment to the people of Ukraine and secure passage of the support needed to help Ukraine at this critical moment." Biden has requested $24 billion to help Ukraine, supporting the $113 billion Congress has approved for military, humanitarian, and economic aid since Russia's invasion. 90 House Republicans and 9 Senate Republicans voted against it. It didn't include major spending cuts which was a key demand from the right-wing Republicans holding up negotiations. Speaker of the House Kevin McCarthy said that he "tried to pass the most conservative stopgap measure possible" but "we didn't have 218 Republicans." It had to be approved by both parties because of the Republican majority in the House and the Democrat majority in the Senate. The shutdown that was avoided wouldn't have stopped programs such as Social Security and Medicare but it would have led to delays in passport application processes, food-safety inspections, small business loans and more. The bill that was passed is called a continuing resolution, which is a spending bill that continues to fund programs until a certain date (in this case, November 17th). Estimates by Goldman Sachs determine that shutdowns reduce GDP growth by 0.2 percent every week that they last, though Brookings concludes that shutdowns don't have a significant impact on the economy. The Congressional Budget Office said that "Although most of the real GDP lost... will eventually be recovered, CBO estimates that about $3 billion will not be."

That's the news for today! Stay safe!