How a US Government Shutdown Could Have Impacted Your Benefits and Services

Updated, 12:45 a.m. Saturday: The U.S. government avoided a prolonged government shutdown after the Senate approved a funding bill early Saturday morning, sending it to President Biden's desk for his signature. The Senate's approval came after the House also overwhelmingly approved the measure Friday evening, just before the midnight deadline.

As the fight over a federal spending bill went down to the wire, the United States faced a looming deadline for a government shutdown, which could have started at 12:01 a.m. on Saturday, December 21 . This has raised questions about the types of services and payments. could be affected if funding were to expire just days before the holidays.

The threat of a shutdown stems from controversy over a spending bill that would have extended funding until March 14, but which collapsed after some Republicans – including President-elect Donald Trump and Elon Musk – opposed the billions of dollars in spending that had been added. to the invoice. A revised version also failed Thursday before another attempt passed the House on Friday.

Without congressional approval for new spending, federal agencies are generally prohibited from distributing money, although there are some exceptions, such as activities to protect life and property. At the same time, agencies must decide which workers will stay on the job, which can have varying impacts on government operations.

“Shutdowns can be disruptive, leading to delays in processing applications for passports, small business loans, or government aid,” David Wessel, a senior fellow in economic studies at the Brookings Institution, wrote earlier this year in a blog post.

Each week of federal shutdown will cost the U.S. economy $6 billion, due to delays in government spending and reduced wages for unemployed workers.

Here's what could be impacted if the U.S. government shuts down.

What happens if there is a government shutdown?

In the event of a federal government shutdown, each federal agency will determine its own plan for how to handle a shutdown, although government operations deemed nonessential will cease.

Many civil servants will be furloughed, although those providing essential services such as law enforcement and air traffic control will continue to report to work. For example, essential government agencies like the FBI, Border Patrol and Coast Guard would remain open.

However, none of these federal workers will be paid until Congress approves a new spending bill. Once the shutdown ends, workers will receive retroactive paychecks covering the days they were furloughed or had to work without pay, according to the Office of Personnel Management.

This could create difficulties for some officials, as occurred during a shutdown that lasted more than 30 days, beginning on December 22, 2018. During this shutdown, many federal employees turned to food pantry and other forms of assistance to get through the crisis. several weeks without receiving pay.

Could a shutdown harm the US economy?

Each week of federal shutdown will cost the U.S. economy $6 billion, due to, among other things, delays in government spending and reduced wages for unemployed workers, according to EY chief economist, Gregory Daco, in an email.

“A government shutdown could leave a visible mark on the economy,” he wrote. “In addition to the direct macroeconomic consequences of a closure, the confidence of financial markets and the private sector could also be affected.”

Is Social Security affected by a government shutdown?

The nation's 67 million Social Security recipients would continue to receive their checks even if the government shuts down. Medicare will also continue to operate, meaning medications or treatments for seniors covered by the health care plan will not be affected.

This is because Social Security and Medicare benefits are authorized by laws that do not require annual approval.

However, the Social Security administrative budget is discretionary, meaning it must be approved by Congress, according to AARP. As a result, some services offered by the Social Security Administration could be affected by a shutdown, such as benefit verification and new benefit applications, the group says.

Would a government shutdown affect the TSA or air travel?

With millions of Americans expected to travel over the holidays, many questions arise about the impact a shutdown could have on air travel. Because they provide essential services, air traffic controllers and Transportation Security Administration agents would be required to work without pay.

About 59,000 of TSA's 62,000 workers are considered essential and would continue to work without pay during a shutdown, the TSA said in an email to CBS News. But a closure could cause delays at airports over the holidays, the agency warned.

“We expect to screen 40 million passengers over the holidays and through January 2,” a TSA spokesperson said. “While our staff has prepared to handle large numbers of travelers and ensure safe travel, a prolonged closure could result in longer wait times at airports.”

Does USPS deliver mail during a government shutdown?

Yes, because the U.S. Postal Service is an independent agency. During previous outages, operations continued. This means that mail would still be delivered and post offices would remain open.

Is the military paid during a government shutdown?

Active-duty members of the military and federal law enforcement would continue to work, but would not be paid until Congress approved new spending. But most civilian personnel working for the US Department of Defense would be furloughed.

Veterans Affairs and the Department of Defense are expected to begin alerting workers about shutdown protocols on Thursday, according to Military Times. The impact will likely be felt during the first week of January, when the first military paychecks for 2025 are deposited, which are expected to include a 4.5% pay increase for all troops, the publication notes.

What closes during a government shutdown?

Many services would be suspended or delayed in the event of a shutdown, including environmental and food inspections conducted by the Environmental Protection Agency and the U.S. Food and Drug Administration, according to the Committee for a Responsible Federal Budget, a policy group public which focuses on federal spending.

National parks would likely be closed, while the National Institutes of Health could also be affected, the group noted.

Although taxes are still due, such as estimated quarterly payments due on January 15, the IRS could also be affected by holidays, although tax filing season typically doesn't start until late January. Still, a shutdown plan released earlier this year said many IRS functions would cease, including tax audits and services such as responding to taxpayer calls.

How long could a government shutdown last?

The risks of a government shutdown have increased with the latest developments, according to Goldman Sachs analysts in a Dec. 18 research note. But, they added, “a prolonged shutdown seems unlikely in our view.”

A spending measure could also pass before the Dec. 21 deadline if Republicans can revise it to appease Trump, who has opposed adding billions of dollars in spending to the bill, analysts added from Goldman.

“Trump's opposition was unrelated to major components – he stated his support for expanded spending, disaster relief and farm aid – so it's possible a revised package could still pass before” the deadline, they wrote.

The Associated Press contributed to this report.

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Aimee Picchi

Aimee Picchi is an associate editor at CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and wrote for national media outlets including USA Today and Consumer Reports.

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