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US government shutdown: Military, national security, air travel, other services to be hit

The imminent shutdown - the country's fourth partial shutdown in the past decade - will trigger a likely dip in consumer confidence, causing widespread cutback on spending. The stock market would also be volatile during this period.

September 29, 2023 / 11:40 IST
While the next fiscal for the US commences on October 1, the Congress standoff persists, indicating a likely shutdown in the country.

The US federal government is inching closer to a shutdown on October 1 if Congress hits a no-deal situation on the funding legislation for the next fiscal year. This would mark the country's fourth partial shutdown in the past decade.

What is a shutdown in the US?

Every year Congress passes legislation to fund the federal government for the next fiscal. Failure of legislators, however, to conclude the process on time results in a shutdown of the government. The next fiscal for the US commences on October 1, and the Congress standoff persists with pending approvals for necessary funding bills.

Impact of a shutdown

If the shutdown does happen, here's how it will affect Americans' daily lives:

Military

Service members will continue reporting for duty but will not get paid during a shutdown. Civilians serving the Department of Defense will likely be temporarily discharged, according to an NPR report quoting White House National Security Council spokesperson John Kirby.

Certain Pentagon activities, like operational planning and military recruitment, will also be put on hold, it is learnt from the report.

Also Read | US government estimates last quarter's economic growth was 2.1%, unchanged from previous estimate

Air Travel

As per a Reuters report,  U.S. Transportation Secretary Pete Buttigieg said on September 27 that a partial government shutdown could disrupt air travel, and 1,000 air traffic controllers in training might be temporarily discharged.

In the past too, federal government shutdowns have caused significant delays and longer wait times for travelers, the report further noted quoting the White House.

The US Travel Association projects a partial shutdown to cost the country's travel economy $140 million a day.

Loan Services

As per a CNBC report, 90 percent of staff at the U.S. Department of Education may be temporarily suspended. Besides, borrowers who call the Education Department enquiring about their bills will face a difficult time getting answers, said Emerson Sprick, an economic analyst.

In The Long Run

The shutdown and disruptions are anticipated to adversely affect the US economy. There will be a likely dip in consumer confidence, causing widespread cutback on spending, and investors are also expected to maintain caution. The stock market too will be volatile during this period.

With Agency inputs

Moneycontrol News
first published: Sep 29, 2023 11:19 am

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