Will the United States be able to pay its civil servants next week? The 2024 budget must be adopted by Congress before Sunday October 1. But without an agreement between Democrats and Republicans, who are at loggerheads a little over a year before the presidential election, the federal administration will have to stop certain payments. A “shutdown” would have consequences in many areas. With a variable magnitude depending on the duration and scope of this paralysis of the federal administration. State of play.
Unpaid civil servants and soldiers
The first victims would be the approximately two million federal civil servants who would see their salaries suspended for the duration of the “shutdown”. Whether they are required to continue working or placed on technical unemployment, civil servants will have to wait for Congress to reach an agreement, signing the end of the “shutdown”, to receive their salary, warns the union of federal government employees (AFGE) .
During the paralysis of 2013 and early 2018, “around 850,000 of the 2.1 million federal employees (excluding the postal service) were placed on technical unemployment”, details the Committee for a Responsible Federal Budget (CFRB), a bi-partisan organization.
On the defense side, 1.3 million serving soldiers will work without being paid, according to the White House. “Our troops […] will still defend the country and ensure our national security interests around the world, but they will not be paid for it. And that means they and their families will suffer,” John Kirby, coordinator of the National Security Council, said in a video released by the White House.
Air transport disrupted, national parks slow
Air traffic controllers and Transportation Security Agency (TSA) officials will work without pay, potentially causing delays.
During the last paralysis, which lasted 35 days in December 2018 and January 2019, the queues at security checks were longer due to the absence of certain agents, causing the closure of some of the ticket counters. security, underlines the CFRB. Flights were even temporarily interrupted at LaGuardia Airport in New York due to “the absence of ten air traffic controllers”, causing delays along the line. “The vast majority of our members are required to work without pay for the duration of a shutdown,” said Rich Santa, president of the air traffic controllers union (NATCA).
National parks could also be affected, the “rangers” who take care of them being federal civil servants. In 2013, more than 400 parks were closed in the country, with the loss of revenue estimated at $500 million. In 2018-2019, however, the majority of parks remained open without offering services to visitors, but damage was reported and trash cans were overflowing.
Uncollected trash cans on the National Mall near the Capitol in Washington on December 24, 2018.
© / Getty Images via AFP
Food aid alert
A “shutdown” would “endanger vital nutritional assistance for nearly 7 million women and children” who rely on “WIC,” a program “which affects nearly half of the babies born in this country.” alerted the White House on Monday in a press release.
Another food aid program for low-income households, “SNAP”, could also be disrupted if the “shutdown” lasts more than a month, adds the CFRB, which also specifies that stores will not be able to update their data: it is therefore impossible to accept payments from new beneficiaries.
“Essential services” spared
Essential services “continue to operate,” according to the CFRB, citing in particular border protection, hospital medical care, air traffic control, law enforcement, or maintenance of the electrical grid.
“Part of the legislative and judicial staff were also largely protected” during previous “shutdowns”, and expenses linked to pensions as well as the health of low-income and elderly people (Medicare and Medicaid programs) had also been maintained , but the registration requests were postponed.
Sluggish economic growth, blind Fed
Each week of “shutdown” could cost 0.2 points of growth to US GDP in the 4th quarter, according to a note from economists at Goldman Sachs, published on Wednesday. In turn, it will be necessary to count an identical impact in the 1st quarter of 2024, they emphasize.
Another consequence of the absence of civil servants: economic data will not be published. Figures for GDP, inflation, unemployment, among others, will remain unknown until the end of the “shutdown”. This could in particular complicate the work of the American central bank, the Fed, which wants to slow inflation, but needs these elements to establish its monetary policy – in particular whether it continues to raise its rates.