XAR - 2 Major Sectors Will Likely Take The Hit If Government Shuts Down In October | Benzinga
Just three months after achieving a deal that scratched a government default, House Speaker Kevin McCarthy is again under pressure to find common ground between far right Republicans and Democrats in order to avoid a government shutdown.
Sept. 30 is the last day of the fiscal year and the deadline by which lawmakers need to agree on how to allocate funding for 438 governmental agencies. If the Congress doesn't approve a spending bill by then, most government agencies will pause their activities, unable to pay salaries.
What happens in a government shutdown? Federal workers deemed essential, like mail delivery, tax collection and border security agents, the Coast Guard, prison staff, prosecutors from the Department of Justice and military personnel would continue to carry out their duties but would not receive compensation for their work until the situation is resolved.
Those not considered essential, — a large percentage of the 18 million civilian government employees — would be furloughed without pay. The last time the U.S. government shut down was during the 2018-2019 budget season, when the government furloughed roughly 800,000 employees for 35 days in the longest shutdown in history. Since 1970, there have been a total of 20 shutdowns of various lengths, some as short as only a few hours.
A government shutdown would temporarily reduce GDP by 0.15% for every week that passes, according to Goldman Sachs.
McCarthy's dilemma: It is likely that Congress ...