Americans worried about a government shutdown can breathe easier after Congress passed a last-minute bill over the weekend to fund the government, just hours ahead of the deadline. But with another funding deadline looming in mid-November, a shutdown remains a real possibility — something that could have a major impact on the finances of millions of Americans.
In what The New York Times described as a “stunning turnabout,” the Republican-led U.S. House on Saturday passed a bipartisan plan to fund the government for an additional 45 days. That came after earlier attempts fell short, leading many experts to believe that a shutdown was imminent.
The House bill was then approved overwhelmingly by the Senate in an 88-9 vote, The Washington Post reported. President Joe Biden later signed the bill, which kept the government open.
That doesn’t mean the problem is solved, however. Many Democrats are not happy that the bill doesn’t include aid to Ukraine, while some Republicans are unhappy that House Speaker Kevin McCarthy (R-Calif.) reached across the political aisle to get the stopgap bill passed.
These issues will likely intensify over the next month-and-a-half, meaning that when the next vote comes up in mid-November, the United States will once again face the prospect of a shutdown.
Americans have already been bracing to take a financial hit from the shutdown. Here are four immediate consequences to your wallet should the government shut down next month:
1. Job Losses
Government shutdowns can make things very difficult for employers as federal functions and services are suspended, the WaPo reported. For example, small businesses will lose out on millions of dollars in federal loans, leading to cutbacks, job losses and rising unemployment.
2. Economic Slowdown
CNN, citing estimates from EY, reported that each week of a government shutdown could cost the U.S. economy $6 billion and shave GDP growth by 0.1 percentage points in the 2023 fourth quarter. The impact would be especially painful for the travel industry due to flight disruptions and the closing of national parks. Whenever the economy slows down, workers lose out on hours and pay.
3. Missed Paychecks
Military members, air traffic controllers and other essential federal employees will have to keep working without pay during a shutdown, meaning their wallets will get hit directly. The same is true of hundreds of thousands of other government employees who will be furloughed with no paychecks.
4. New Business Stalls
Businesses depend on federal agencies such as the Small Business Administration to provide financing and other services that help them launch and grow — and when the government shuts down, those services shut down, too. Shutdowns can also lead to staff cuts at the Securities and Exchange Commission, which means corporate mergers and initial public offerings are either delayed or paused altogether, CNN reported. When businesses can’t expand, they stop hiring and might even have to lay off workers.