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Current Affairs

US government staring at partial shutdown

Date: 04 October 2021 Tags: Miscellaneous

Issue

As the new fiscal year is set to begin on October 1, the US Congress is making efforts to prevent partial government shutdown.

 

Background

US lawmakers are currently involved in designing a legislation that will allow different government agencies to withdraw funds for the whole year.

 

Details

  • A full lockdown is set to affect services such as social security, national parks, medicare, air travel and health services etc.

  • The total shutdown event usually takes place when Congress fails to fund the government and it is then forced to stop all non-essential services.

  • Essential services of the government such as defense and police function as usual during shutdown.

 

The appropriation acts

  • The US Congress passes appropriations act that allows different federal agencies a legal basis to withdraw money from the US Treasury.

  • Agencies cannot withdraw money from the treasury without these appropriation acts. This has been predefined under Article 1 of US constitution.

  • These annual appropriation acts, which are 12 in number, direct withdrawal of funds from the US Treasury for specific purposes for that particular year. 

  • These acts have to be signed by the President to become law. If the Congress and President fail to reach consensus, signing may be delayed and causes shutdown.

  • In case a consensus cannot be reached within end of fiscal year, a stopgap funding bill will be passed. This bill will allow agencies to get access to funds.

 

Effects of the government shutdown

Federal government employees may be furloughed and some non-essential government activities may be shut down.

 

Avoiding shutdown

  • A temporary legislation has to be introduced by the senate to ensure funds are available for federal government at least till December.

  • These funds will be used to run various government programmes that are covered under appropriation acts and receive funds from federal budget.