The United States government is facing the first federal shutdown in almost seven years, after the US senators failed to pass a last-minute funding bill. The latest development comes amid President Donald Trump’s threats of new layoffs of federal employees.
The stopgap funding bill crafted by the Republicans needed at least 60 votes, but could only muster 55 against 45, as there was no breakthrough despite negotiations in Congress. Tuesday marks the end of the fiscal year.
The Democrats have been demanding the extension of healthcare subsidies and the reversal of cuts to domestic programmes.
Following the vote, the White House issued a memorandum saying: “President Trump supports passage of H.R. 5371, but it is now clear that Democrats will prevent passage of this clean CR prior to 11:59pm tonight and force a government shutdown.
“Affected agencies should now execute their plans for an orderly shutdown. It is unclear how long Democrats will maintain their untenable posture, making the duration of the shutdown difficult to predict. Regardless, employees should report to work for their next regularly scheduled tour of duty to undertake orderly shutdown activities."
What does US government shutdown mean?
The standoff between the Democrats and Republicans stems from healthcare spending, with the former calling for an extension of expiring health care benefits, among other demands.
A formal government shutdown would mean that the essential workers, including the military, would have to work without pay, and non-essential workers would face suspension or be discharged from their jobs. Reports suggest that it would affect around 7,50,000 federal workers.
Fox News reports that programmes like Medicare, Social Security and Medicaid, Postal Service, Veterans' Affairs hospitals and clinics, and Immigration and Border Patrol security activities, will continue. Agencies like the IRS and Small Business Administration will be affected by the furlough.
What is the cost of the shutdown?
Though there was a partial shutdown this year, its cost is yet unknown. But, the last time the US government shut down – in 2019 – the Congressional Budget Office estimated that around $18 billion in federal spending delayed, causing a dip of $8 billion in that year’s first quarter GDP.
Trump hints at mass layoffs
US President Trump blamed the Democrats for the standoff, and threatened mass layoffs. “We'd be laying off a lot of people that are going to be very affected. And they're Democrats, they're going to be Democrats,” he said at a White House event.
This comes amid the largest buyout programme in 80 years, as more than 150,000 federal workers are set to leave this week, while thousands have already been fired earlier this year.
What next?
Senate GOP leader John Thune said the lawmakers may try again later in the week, but a breakthrough seems unlikely.