WASHINGTON, Oct 1 — A US government shutdown that could affect millions of Americans began today after congressional Republicans and Democrats failed to resolve a budget deadlock before funding expired at midnight.

Who is affected

Hundreds of thousands of federal workers could be furloughed, but those deemed essential will continue working.

President Donald Trump’s administration has raised the stakes this time by directing agencies to consider firing staff instead of the usual practice of delaying pay until lawmakers reach a deal.

The American Federation of Government Employees (AFGE) said the need to avoid a shutdown had “reached a new level of urgency.” AFGE President Everett Kelley urged lawmakers to return to the table, stressing that “federal employees are not bargaining chips.”

Typically, non-essential staff are told not to report to work, while those providing critical services such as air traffic control and law enforcement stay on the job but without pay until the shutdown ends.

Services hit

Social Security and Medicare benefits will continue because they are funded by permanent legislation.

The National Park Service (NPS), however, will likely be disrupted. Millions of visitors were turned away during a 2013 shutdown, and though the Trump administration kept parks open during the 2018–2019 shutdown, limited staffing left areas damaged, according to the National Parks Conservation Association.

Length of shutdown

It is unclear how long the closure will last. Economists warn that pressure will mount after two weeks, when many federal employees risk missing their paycheques due to the typical US pay cycle.

The longest shutdown on record lasted 35 days between December 2018 and January 2019 during Trump’s first term.

Max Stier, president of the Partnership for Public Service, said the damage of a shutdown is often “more insidious” as it interrupts long-term investments needed to keep government functioning.

Economic impact

Nationwide economists Kathy Bostjancic and Oren Klachkin estimate a shutdown could trim GDP growth by 0.2 percentage points for each week it continues.

Carl Weinberg of High Frequency Economics warned that if layoffs occur this time, “the path back to a functioning government will be longer, and rockier.”

The stoppage could also delay key economic data, including Friday’s closely watched US jobs report, as the Department of Labor’s Bureau of Labor Statistics would suspend operations.

SPI Asset Management’s Stephen Innes said the absence of fresh data could unsettle investors. “Markets hate uncertainty more than bad news,” he cautioned. — AFP