The federal government is in a partial shutdown, as Democrats, Republicans and the White House are at an impasse about a line item representing 0.004% of the spending this fiscal year — $5 billion for President Trump’s border wall.
Nine federal departments and several agencies — representing about a quarter of the $1.24 trillion in government spending for fiscal year 2019 — shut down early Dec. 22. The remaining three-quarters of the government, including the Department of Defense, Department of Labor and Health and Human Services, were already funded and won’t be affected by the shutdown.
Federal rules prohibit employees classified as “essential” from taking paid time off, including time for illness, vacation or religious obligations during a shutdown. That includes security staff at airport checkpoints and air traffic controllers. Roads to national parks and campgrounds would remain accessible, but services, such as restrooms and visitors’ centers, would be closed.
Here’s a look at how a lapse in government funding would affect key agencies and federal functions:
Housing and Agriculture
The Department of Housing and Urban Development would continue to make Section 8 housing voucher payments, which assist low-income families. The U.S. Department of Agriculture would continue to inspect meat, poultry and eggs, and its data releases on cotton, dairy, produce and livestock would continue as needed to minimize market disruptions.
New housing voucher requests would not be processed but staff would be available to provide oversight of the program. HUD’s homeless assistance grants, including support for veterans, would continue to operate. Ginnie Mae, a government-owned corporation whose job is making mortgages more affordable, would continue to guarantee mortgage securities.
The U.S. Department of Transportation would keep about two-thirds of the department’s more than 50,000 employees on the job, according to its shutdown plan.
Air traffic controllers, critical airline safety inspections and the registration of aircraft would continue to work if a government shutdown occurs, according to a statement by the Federal Aviation Administration. Transportation Security Administration’s airport functions would continue to operate, so air travel would not be affected. The Federal Highway Administration and Federal Motor Carrier Safety Administration, which regulates trucking, would continue their operations. Amtrak would continue its normal operations during a short-term shutdown, according to a spokeswoman for the railroad. Work developing rules for self-driving cars, investigations of vehicle safety defects, crash testing, enforcement efforts and some research projects would be halted at the National Highway Traffic Safety Administration, according to the plan.
Treasury and Trade
The Treasury Department, which includes the Internal Revenue Service, would continue to address any disruptions in the liquidity in the financial system, monitor financial and terrorism intelligence and continue small businesses lending. The U.S. Trade Representative would continue negotiations and enforcement.
The start of the 2019 tax filing season, which will begin at the end of January or early February, won’t be delayed even if the government shuts down, according to Ken Corbin, the commissioner of the IRS’s Wage and Investment division. The agency has yet to announce an official start date. The IRS typically issues refunds within 21 days of the tax return being filed, according to the agency’s website. If the shutdown were to extend into the filing season, or another one were to occur, refunds would be delayed, according to the agency’s shutdown plan. Requests for disaster relief for victims of hurricanes or wildfires would continue to be processed, but audits would be paused.
SEC and CFTC
The Securities and Exchange Commission would halt many of its routine activities and significantly scale back its law enforcement and litigation efforts. The Wall Street regulator would reduce staff to around 300 from over 4,500 normally, according to a plan for a shutdown.
The SEC would continue working only on “emergency enforcement matters” and not open new investigations or exams that can be deferred until the government reopens. The agency would halt processing applications for regulatory exemptions, pause work on ongoing litigation, and generally pause the rule-making process. Searches on its Edgar corporate filing database, which is run by a contractor, would continue to be available. The Commodity Futures Trading Commission, which oversees a chunk of the roughly $500 trillion global derivatives market and trading in Bitcoin futures, will “severely curtail” its operations with a shutdown, the agency said in a memo.
Business & the Economy
The shutdown could postpone the release of several scheduled economic data releases with market-moving potential.
Those wanting to get certain details on the state of the housing market and trade would have to wait until the government reopens: The U.S. Census Bureau would delay all economic releases, which next week include new home sales, merchandise trade and inventories. Agencies not affected by the shutdown — including the Labor Department, Federal Housing Finance Agency, and the regional Federal Reserve banks — would continue releasing data on a regular schedule. That means the markets would still get data on weekly unemployment claims, regional manufacturing surveys and house prices. The independent Energy Information Administration, which publishes projections and reports relied upon by oil traders and energy analysts, was already funded through the fiscal year and wouldn’t be affected by a shutdown. The last major government shutdown in 2013 delayed some releases for more than a month, such as new home sales and housing starts; others were delayed for several weeks, including trade and inflation.
Parks & Public Lands
National Park Service roads, lookouts, trails and open-air memorials generally would remain accessible — just don’t try to use the bathroom or get insight from park rangers. All Smithsonian museums and the National Zoo will remain open with normal hours until Jan. 1.
The park service won’t provide visitor services, including restrooms, collecting trash and plowing roads. Campgrounds, boat ramps and other recreational sites overseen by the Bureau of Land Management would stay open, but restrooms would be locked and water systems would be shut down.
Energy & Environment
Oil, gas and coal companies should see little impact on day-to-day operations, as several federal agencies dip into nonlapsing appropriations and use exemptions to ensure most permits keep flowing and inspectors don’t stop examining drilling rigs and coal mines.
The Bureau of Safety and Environmental Enforcement would keep processing new permits to drill and performing inspections needed to begin drilling. Applications to modify drilling permits would be considered on a case-by-case basis, with the agency focusing on those needed to ensure safe operations. The Bureau of Land Management would keep deploying inspectors to oil and logging facilities on federal land. The BLM also would keep permitting selected energy, minerals, grazing and other activities where it collects a processing fee. Employees focused on the administration and regulation of the Trans-Alaska Pipeline that ferries crude from the North Slope also would stay on the job.
DOJ and Courts
The Department of Justice activities will largely continue uninterrupted during a shutdown since its operations involve protection of life and property. U.S. attorneys will continue their activities without interruption, according to a shutdown plan from the department.
Special Counsel investigations, such Robert Mueller’s probe into the Russian interference into the 2016 presidential election, also wouldn’t be affected because it has permanent, indefinite funding, according to the DOJ plan. The Supreme Court would continue its normal operations and the building will continue to be open to the public during normal business hours. Federal courts could remain open for about three weeks using funds from other sources, but the courts would look for ways to limit expenses, such as cutting travel and training, according to U.S. Courts spokeswoman Jackie Koszczuk.
Foreign Affairs and Homeland Security
Interruptions at the Department of Homeland Security and the State Department would likely be minimal, since most operations and personnel are considered essential.
The vast majority of Customs and Border Protection and Immigration and Customs Enforcement workers would stay on the job if there’s a shutdown. At the Federal Emergency Management Agency, almost 90% of the agency’s more than 20,000 employees are exempt from furlough, according to a contingency plan released in March of this year. Nor would the shutdown halt FEMA’s disaster payments, which go to victims of recent hurricanes, wildfires and other emergencies. Embassies overseas are open in the event of a shutdown. Department guidance from the last time there was a threat of a shutdown, in January 2018, says that consular operations at home and abroad “will remain 100% operational as long as there are sufficient fees to support operations.” The only hitch would be if a passport office is located in a government building that’s closed because of a shutdown, according to the document. Secretary of State Michael Pompeo is still expected to travel to Brazil, where he’ll attend the Jan. 1 inauguration of President-elect Jair Bolsonaro, even if the U.S. government shuts down.
From Bloomberg News