Once again Congress is on the edge of a government shutdown because of a failure to agree on a budget. The last go-around was back in September when a compromise on September 25 landed a three-month continuing resolution before the October 1 deadline.
The new deadline is December 20, nine days away. The last time, 78 senators voted in favor and 18 against. In the House, it was 341 for, 82 against.
The Hill reported that there are members on both sides of the aisle in both chambers who expect the government will stay open. The negotiations aren’t clear from the outside, but reportedly assessing disaster relief is a “key factor” because members expect extra disaster aid after the hurricanes in September and October to accompany a continuing resolution to extend current spending into early 2025.
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Part of the disagreement between the Biden administration and Republicans is whether extra money would go into any programs. Some of the requests were for the Environmental Protection Agency and the State and Education Departments.
Should there be a shutdown, there could be a negative impact on the economy as government spending, while nowhere nearly as important as the 69% of GDP that consumer spending provides, is still significant.
Only “essential” personnel would be working, although not paid, and hundreds of thousands of federal workers would be sent home. According to Reuters, most consumer protection workers at the Federal Trade Commission would be furloughed and about half of the antitrust division.
Focusing more on CRE, there would be no new money to shelter migrants. Federal courts would be open for so long as they had money. Most federal civil litigation would be put on hold. Weather forecasts would continue. The Centers for Disease Control and Prevention (CDC) would monitor disease outbreaks. Inspections of hazardous waste sites and drinking water would stop. The Federal Emergency Management Agency could run out of disaster relief funds.
The Securities and Exchange Commission would furlough the bulk of its staff and shut down almost all activity.
Bank regulators — the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency — operate off industry fees and would continue as normal.
Housing subsidies could be at risk.
One of the biggest problems for the industry would be the stoppage of all major U.S. economic data, whether from the Bureau of Labor Statistics or the Bureau of Economic Analysis. This becomes tricky because the Fed depends on the information, which includes jobs and inflation reports, to make decisions about interest rates. No data, difficulty in making any decisions. But there's still time to avoid all of those issues.
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