The US is approaching ‘Shutdown’: what consequences would a budget paralysis have?

The imminent paralysis of public services in the United States will affect many areasfrom salaries that will not reach public officials to food aid that will be reduced, and even flight delays, with a depth that will vary depending on the duration of the disagreement.

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Civil servants and soldiers without salaries

Some 1.5 million federal officials and 2 million military personnel will not receive salaries during the shutdownaccording to the White House Budget Office (OMB).

Some, whose functions are considered “essential,” will have to continue working. Others will remain technically unemployed. They will receive their salary retroactively once the budget paralysis is resolved.

Air traffic disrupted, parks closed

Significant delays could occur at airports as air traffic controllers and Transportation Security Agency (TSA) officials work without pay.

Security checks will likely be delayed. During the last episode of this nature between December 2018 and January 2019, flights were temporarily suspended at some airports.

Most of the famous national parks such as Yosemite and Yellowstone and even the Statue of Liberty will be closed or will not offer services.

Subsidy alert

Some 7 million women and children could be deprived of food aid, according to the White House.

Aid for victims of natural disasters will be delayed.

Essential services

Those considered “essential services” such as border protection, hospital medical care, air traffic control, law enforcement or maintenance of the electrical grid will continue to operate.

Retirement and health spending for low-income seniors under the Medicare and Medicaid programs will be maintained, but enrollment requests will be delayed.The tax service will not work.

National security

A spokesperson for the State Department warned that it is necessary to maintain, in addition to financial aid to Ukraine, humanitarian aid in the world, funds dedicated to the migration crisis or the fight against crime in Africa.

“Delays in access to these funds endanger the national security of the United States and cede ground to China and Russia,” the source warned.

Debt and GDP

The financial rating agency Moody’s, the only one that maintains the maximum AAA rating for US debt, could downgrade it.

Each week of shutdown could cost 0.2 percentage points to US GDP in the fourth quarter, according to Goldman Sachs.

Financial data will not be published. The figures for GDP, inflation, unemployment, among others, will not be known until the crisis is resolved.

AFP