The U.S. government could start not paying its bills on time as early as next month if there is no quick end to a stalemate marked tonight by a vote in which Senate Republicans rejected funding proposals democrats.
Funding is expected to expire on Thursday. But an interim bill now rejected by the Senate would have extended funding to keep the government operating until December 3, while suspending the debt limit to allow the government to continue borrowing until the following December.
Democrats, who tightly control Congress, must now find a way to fund the government within three days, or somehow produce a different plan to keep federal employees working.
In the most recent federal shutdown, which lasted from December 22, 2018 to January 25, 2019, partial inactivity of the Securities Exchange Commission forced companies seeking to list their shares to delay their plans.
The SEC has laid off thousands of employees and stopped reviewing and approving company registration records, including initial public offering of shares.
“We went through a period where we didn’t know when transactions might come to market,” recalls Alan F. Denenberg, partner at Davis Polk & Wardwell.
Today’s market is even hotter than that of winter 2018-2019. So an SEC shutdown could create even more disruption, he said.
“Last time it went pretty bad. And if we get to that point again, where the SEC is closed, all the IPOs, all the PSPCs and all the other things that are going on right now, will stop again, ”he said. “It can be quite serious. “
Agencies have already been ordered to produce contingency plans for the shutdown, which means the United States could revisit scenes from 2018, when trash cans on federal property overflowed with trash as agencies in the whole government have put their staff on leave.
Executive power agencies were required to submit plans to curtail all activities except those under special mandates, those involving the protection of life and property, which allow the president to perform his duties. , or are funded outside of the budget process approved by Congress.
About three in five workers will be told to stop working in the event of a shutdown. And as with previous shutdowns, the result will be a seemingly absurd federal archipelago, with agencies like the National Labor Relations Board almost completely shutting down with just 14 of its 1,218 employees remaining, while the Federal Deposit Insurance Corporation remains intact because the salaries of its employees are paid by a special insurance fund.
While taxpayers will more easily encounter evidence of the closure when they are diverted from parks, museums and other public facilities, critical agencies will also suddenly find themselves short of staff.
The Centers for Disease Control and Prevention, on the front line in the fight against Covid 19, will put 38% of its staff on leave, while 45% of employees will be put on leave at the CDC’s parent agency, the Ministry of Health and Social Services.
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