Will Americans Face Another Government Shutdown?

With the recent conclusion of the longest government shutdown in US history, military families like Beth Johnson's are experiencing a wave of uncertainty. Johnson, a military wife, and mother of two, highlights how the shutdown profoundly affects families reliant on federal income, leaving many to question what will happen when funding runs out again in January.

Last updated: 19 October 2023 (BST)

What’s happening now

The recent government shutdown lasted an unprecedented 43 days, impacting millions across the United States. Following negotiations, Congress reached a temporary funding agreement that will keep the government running until the end of January 2024. While federal workers will receive pay for the days missed, many families, particularly those dependent on programs like the Supplemental Nutrition Assistance Program (SNAP), are still grappling with the aftermath. The looming threat of another shutdown is pushing families to make adjustments and prepare for potential financial instability once again.

Key takeaways

• The recent US government shutdown lasted 43 days, the longest in history.
• Funding has been secured through January 2024, but uncertainty remains.
• Military families and federal workers are among the hardest hit by shutdowns.
• SNAP benefits have resumed, but health insurance subsidies remain unresolved.
• Families are preparing for potential future shutdowns by tightening budgets and stockpiling resources.

Timeline: how we got here

The government shutdown began on 1 October 2023, when Congress failed to agree on a budget. The following significant events occurred:

• 1 October 2023: Government shutdown begins due to budget impasse.
• 17 November 2023: Congress reaches a temporary funding agreement.
• 1 January 2024: Funding agreement expires, risking another shutdown.

What’s new vs what’s known

New today/this week

The temporary agreement reached this week includes provisions for federal workers to receive back pay for the duration of the shutdown and ensures that SNAP benefits will continue until September 2024. However, health insurance subsidies, which were a point of contention during negotiations, were not included.

What was already established

Prior to the shutdown, many families were already struggling with the impact of inflation and rising costs of living. The shutdown only exacerbated these issues, with military families and federal employees facing delayed pay and uncertainty over future income.

Impact for the UK

Consumers and households

While the direct impact of the US government shutdown is primarily felt in the United States, UK households may see ripple effects, particularly if economic instability leads to shifts in international markets. Increased uncertainty in the US could affect trade relations and economic forecasts, which may, in turn, influence the UK economy.

Businesses and jobs

Businesses that rely on government contracts may face disruptions as funding challenges persist. This could lead to layoffs or reduced hiring in the UK if similar funding issues arise. Additionally, confidence in the government could affect consumer spending patterns.

Policy and regulation

UK policymakers may watch these developments closely, as they can provide insights into the impact of government funding on public services. If UK governments face similar budgetary challenges, this could lead to debates about public sector funding and its implications for public services.

Numbers that matter

• 1.3 million: Active-duty military personnel affected during the shutdown.
• 43 days: Duration of the most recent government shutdown, the longest on record.
• 42 million: Americans dependent on SNAP benefits.
• 900 GBP: Approximate monthly SNAP benefits for families like Sierra Bird's.
• 1.4 million: Federal employees who went without pay during the shutdown.

Definitions and jargon buster

• SNAP: Supplemental Nutrition Assistance Program, providing food assistance to low-income individuals and families.
• Furloughed: A temporary leave of absence from work, often without pay, due to budget constraints.
• Federal Employees: Individuals employed by the federal government.

How to think about the next steps

Near term (0–4 weeks)

In the immediate future, families should monitor their finances closely and consider budgeting tighter as they prepare for potential future uncertainties. Keeping an emergency fund could help alleviate some pressure in case of another shutdown.

Medium term (1–6 months)

In the coming months, families should seek information on any updates regarding government funding and be prepared for possible changes in SNAP benefits or other federal assistance programs. Staying informed can help families make necessary adjustments to their plans.

Signals to watch

• Updates from Congress regarding funding negotiations.
• Discussions around health insurance subsidies and their impact on families.
• Trends in SNAP funding and related benefits.

Practical guidance

Do

• Review and adjust your budget to prepare for potential financial strain.
• Stay informed about government funding discussions and how they may affect your finances.
• Consider stockpiling essential items if you rely on government assistance programs.

Don’t

• Ignore potential changes in income; be proactive in financial planning.
• Overspend during the holiday season if financial uncertainty looms.
• Assume that current benefits will remain unchanged; stay alert to policy shifts.

Checklist

• Review your monthly expenses and identify areas to cut back.
• Start or increase your emergency savings fund.
• Stock up on non-perishable food items if you rely on SNAP.
• Stay updated on government funding news through reliable sources.
• Assess your insurance needs and explore options if subsidies are in jeopardy.

Risks, caveats, and uncertainties

The situation surrounding government funding is fluid, with various factors that could change the landscape dramatically. Potential disagreements in Congress could lead to further delays in funding agreements. Additionally, the impact of inflation and economic pressures on families may affect their ability to cope with sudden changes. It is important to remain cautious and adaptable as the situation evolves.

Bottom line

The recent government shutdown has highlighted the vulnerability of many families reliant on federal income. As government funding is set to expire again in January, families like Beth Johnson's are preparing for potential financial instability. Staying informed and adjusting financial strategies will be crucial for navigating the uncertainty that lies ahead.

FAQs

What impacts do government shutdowns have on military families?

Military families, like Beth Johnson's, often rely on federal income, making them particularly vulnerable during government shutdowns. They face delays in pay and uncertainty about future income.

How long was the recent US government shutdown?

The recent government shutdown lasted 43 days, making it the longest shutdown in US history.

What assistance programs are affected by government shutdowns?

Programs like SNAP, which provides food assistance to millions, can be delayed during government shutdowns, impacting families who rely on this support for basic needs.