What Do We Need To Know About a Government Shutdown?
If the House and Senate don’t agree on a government funding bill today, our government could shut down tonight at midnight. They won’t let that happen, will they? Actually, they have, repeatedly—this would be the 18th shutdown since 1976; the longest shutdown was 21 days in 1995-96 as congressional Republicans faced off against President Clinton over the budget. Wonkblog writer Brad Plumer has published an extensive Q&A over what this all means on the Washington Post website. We invite you to take a look: Everything you need to know about how a government shutdown works.
The most frequently asked questions seem to focus on what ‘stays open’ and what doesn’t.The laws and regulations (comfortingly) separate federal workers into ‘essential’ and ‘non-essential’ categories. Who’s working? Air traffic controllers, anyone related to national security or public safety, and those working for programs written into permanent law such as Social Security. Who is going home? Well, some of the EisnerAmper team spoke with IRS audit representatives this morning, and the IRS personnel stated they would not be working. Regulatory agencies (SEC, ATF, Centers for Disease Control) will not be operating.
With regard to related hot topics, the key parts of Obamacare rely on mandatory spending that is not related to a shutdown.
Related to today’s wrangling, political uncertainty is pressuring the markets. The Dow was down 92 points, the S&P 500 8 points as of noon today. Treasuries were slightly lower in late-morning action. Asian stocks finished mostly lower as a disappointing read on Chinese manufacturing activity accompanied the U.S. fiscal uncertainty, and it appears the U.S. fiscal delay is also weighing on European equities.