For 35 days, one of the world’s most powerful country functioned with bare minimum administrative support. With predictions that the government shutdown might cause negative growth in the economy, it is certain to cause massive implications on foreign policy and international trade. The reason? A President, Politics and his Promise.
Fiscal Policy of the US
The taxing and spending capacity of a government is tailored in accordance with a country’s Fiscal Policy. In the US, this policy is based on the federal budget, put forth by the President and approved by The Congress. In this way, The Congress appropriates funds to various services and agencies for their functioning. If this is not sanctioned till the 30th of September of each year, a continuous funding resolution as a temporary measure is enacted. When even that fails to follow through and political parties can’t reach a consensus, we enter a deadlock and this forces a government shutdown.
Although the budget has almost always been delayed each year, this particular shutdown was one to go down as the longest in the country’s history. It sent the unified Republican government in a swirl of chaos, that marked the first two years of Trump’s Office. This impasse was a direct consequence of the Democrats flatly declining Trump’s proposal to build a wall for barreling the issue of illegal immigration. The Democrats called this measure inhumane and ineffective.
Nine Senate Democrats needed to get on board with a spending plan to reach the 60 votes needed to pass a bill. When this didn’t happen and Trump refused to sign the conference report to grant his veto, the Senate and the House of Representatives realized a stalemate. Trump’s insistence started boxing him in. Lawmakers scrambled to dodge a shutdown in the limited time frame but it seemed inevitable when both the chambers adjourned without any sign of conclusive agreement on the night of the 21st of December, 2018.
All the non-essential discretionary federal departments came to a standstill. Essential operations like mail delivery and law enforcement remained in place. The worst hit divisions were Homeland Security, Justice, State and Treasury, and several agencies including the Environmental Protection Agency and NASA.
Impact on Federal Workers
The Transport Security Administration had a lot of its employees responsible for screening passengers and baggage calling in sick in airports across the country in what seemed like a coordinated protest. They could have also just been looking elsewhere to compensate for their missed wages. The average waiting time for passengers increased and a spokesman insisted on them not compromising security but it is likely that they downplayed the disruption.
Many National Parks and museums took a blow as well as officials struggled to keep up with the toll that visitors had taken. Visitor safety also became a major concern with limited staffing. At least three people died on National Park Service Land during the shutdown. Garbage and human waste piled up. Science, research and public health were affected too. Time-sensitive research was put on hold as scientists were sent home and the flow of grant money was interrupted. The case of brain drain in agencies of strategic and innovative importance like NASA was also alarming.
Among the furloughed workers were also those at the F.B.I, the Drug Enforcement Administration, the Bureau of Prisons, Customs and Border Protection, the Coast Guard, the Secret Service, to name a few. The irony of the shutdown was that the impact was most acutely felt in the immigration courts and proceedings, dragging out cases unnecessarily. The recent tax changes warranted many questions from taxpayers for the Internal Revenue Service that were all left answered as the agency stopped functioning entirely at that time.
Impact on The Economy
While experts may differ on the estimation of the impact on the economy, the general consensus remains the same—it’s bad and is probably going to get worse considering the instability of the situation. Around 800,000 government employees and their families were directly affected and approximately four million contractors and other small businesses whose clientele includes government agencies and workers were affected as well. Businesses weren’t getting loans, visas were not being granted and courthouses were running out of money. Considering that the US is primarily a spending economy, furloughed workers and others directly impacted considerably reduced their expenditure, thus making a bigger dent in the economy. The holidays, which usually see a standard increase in spending in retail and travel also took a hit, with many choosing to save rather than indulge in their annual splurge. People were simply not injecting their money back into the economy simply because they didn’t have enough of it. Regions which have higher populations of government workers were affected more severely than others, and the shutdown has had a significant negative impact of the local economies of such regions. While the short-term effects can’t be ignored, the severity of the long-term impacts is hard to gauge.
Analysts estimated to see roughly 170,000 new positions but as it turns out, there were almost as many as 304,000 new jobs created during the shutdown. The American job market was the least affected and the US labour market saved the day for the economy. There were ripples felt by the private sector but the companies and businesses found ways to cope. Strong hiring and modest wage gains gave the economy sure footing. The peculiarity that rings through even after it appears that employers shrugged off the shutdown lies in the fact that the unemployment rate increased by 4%. This may be because of the idling of many workers feeling the bite of the shutdown. But overall, the economy tried its best to stay resilient for the most part.
The Wall is important for Trump and his political posse. The 2016 elections were won singlehandedly by his declarations of his great plans to build a wall, to stop cross border illegal immigration from Mexico. His mandate was representative of the fact that the larger American population was hoping for lesser immigrants entering into the system, something that the previous Obama government had encouraged through DACA.
Tremendous numbers of people are coming up through Mexico in the hopes of flooding our Southern Border. We have sent additional military. We will build a Human Wall if necessary. If we had a real Wall, this would be a non-event!
— Donald J. Trump (@realDonaldTrump) February 5, 2019
Considering his latest fiasco with the separation of immigrant families and their children, that ended up being revoked by the District Court, the government was required to reunite separated families within 30 days, to reunite children under five years of age with parents within 14 days, and to permit all separated minors to speak with their parents within ten days. The construction of the wall might be one of the most significant happenings of the century, and in fact, change America’s approach to immigration completely.
However, Trump’s approach to getting funding for this wall might have backfired. According to a poll by the Associated Press, around 60% of Americans blame Trump for the shutdown, primarily because he proudly announced so in his meeting with the Congress Speaker Nancy Pelosi that he’d happily be responsible for the government shutdown that is affecting millions. Many newly elected Democratic Senators also attempted to negotiate a deal with Republican Senate Leader Mitch McConnell to pass the budget for government funding, bypassing the President. The new Congress is also going to possibly add an additional tension on the situation, depending on the elected majority. While the government has been temporarily reopened, the new Congress might change things completely. Trump, who campaigned as a leader for the middle class during his 2016 Presidential run, is being seen as hypocritical and arrogant, loosening the Republican grip on the middle class of America because of their rather negligent attitude. Five billion dollars is not a small amount, and the Democrats are playing to this emotion—projecting themselves as those who have the nation’s interests at heart and are aiming to utilize that money for better use—ultimately giving them an advantage in the 2020 Presidential Elections.
The Road That Lies Ahead
Trump agreed to endorse a stopgap bill on 25th January to reopen the government for three weeks to allow for negotiations. He insinuated that he would shut down the government again or declare a national emergency and use military funding to build the wall if Congress fails to appropriate funds by February 15th.
Large sections of WALL have already been built with much more either under construction or ready to go. Renovation of existing WALLS is also a very big part of the plan to finally, after many decades, properly Secure Our Border. The Wall is getting done one way or the other!
— Donald J. Trump (@realDonaldTrump) January 31, 2019
As of today, Partisan tensions in the State of Union address soared as Trump veered into immigration. With just over a week left for the Congress to pass a border security package, in order to avoid another shutdown, his speech had a significant part devoted to making his campaign case.
.@realDonaldTrump — your last shutdown caused immeasurable pain to 800,000 American workers, contractors, & their families, costing us billions in the process. Stop threatening to take them hostage with yet another shutdown. #NoMoreShutdowns https://t.co/rpCbsdI1In
— Nancy Pelosi (@SpeakerPelosi) February 3, 2019
America and the rest of the world stand and watch as the future of his proposal remains bleak and uncertain. While millions are affected, the President, Pelosi and other politicians debate and deliberate over negotiations for a wall, that is at the moment, a glorified representation of all that is changing in the United States – the promised land of immigrants.
Written by Shuba Murthy and Siri Rajanahally for MTTN
Graphics by Sayantan Karmakar
Featured image and artwork by Ashmita Priyadarshini
Sources: BBC, Reuters, New York Times, Forbes