Budget dispute: USA before “Shutdown”: These consequences threaten

Democrats and Republicans regularly argue in the United States up to the last minute. But rarely was a “shutdown” – a standstill of the government business – as probably as this time. The positions of the two major parties are too far apart, which is why political observers do not expect the budget to be passed in time for the next twelve months.

What are the consequences of a “shutdown”? The most important questions and answers at a glance.

Every September, Republicans and Democrats in the US Parliament argue about the federal budget for the new fiscal year from October 1st. If you cannot agree on a budget, the government lacks the basis for further financing – a “shutdown” threatens. So that this does not occur, at least a transitional budget would have to be decided.

Finally, a draft failed for a bridging financing on the US Senate: At least 60 of the 100 senators have to agree to a draft law. The Republicans have a majority with 53 seats – so that a project is actually waved through, they are dependent on the support of at least seven democrats.

These are aware of their position and therefore try to discharge concessions to the party of US President Donald Trump in return for their votes. The parliament often only agrees on a budget at the very last moment. In the past, the congress often struggled from one transitional budget to the next.

What happens in a “shutdown”?

If no household or at least a transitional budget is adopted, the government is initially no longer available for further funding. There is a payment stop at the federal expenditure in the US administration and the continued operation of many authorities and offices.

Institutions in the United States, which are not considered essential for security and basic care, would then have to close or send their employees on forced vacation. Government employees would no longer receive a salary. Like many Americans, some of them live from salary check to salary check, have no large reserves. Whether they are paid afterwards depends on the respective employment contract. For example, subcontractors are not guaranteed.

According to the US media, the budgetary office (OMB) recently instructed several federal authorities to consider permanent layoffs in the event of a “shutdown”. This is linked to the line of the Trump government: In the first few months of his term, numerous civil servants had been released from duty in the course of comprehensive cuts.

In contrast, employees and emergency services in important areas such as the military, emergency services, border security or air safety work during a “shutdown” initially unpaid – the salary is usually paid afterwards. Congress members – and also the US President – continue to receive their regular salary.

The longest “shutdown” in the history of the USA occurred during Trump’s first term. Over the turn of the year 2018/2019, government operations largely came to a standstill for more than five weeks.

What does a “shutdown” mean for the US population?

For the US population, a standstill of government transactions can mean that applications are being processed more slowly, people have to wait longer for tax notices and close national parks. Tourists – also from abroad – could also be affected: In a letter to the party leaders in the congress, the US travel association warned of flight delays and dusperies. He put the costs of this “completely avoidable blow” at one billion US dollars a week.

A “shutdown” can also create unrest on the financial markets. Berenberg economist Atakan Bakiskan assumes that the White House classifies an authority responsible for labor market statistics as not systemically relevant and that it would have to settle its activities from Wednesday. The number of employment and consumer prices could then not be published on time and thus also influence the decision of the US Federal Reserve. The Federal Reserve (FED) checks the key interest rate based on the data and decides on a further possible interest rate reduction.

What is the current status?

The federal budget in the United States usually comprises twelve budget laws. According to a non -partisan committee for the federal budget, no one has so far been adopted. The US Congress is now faced with the task of at least finding enough votes for a transitional budget to keep the government apparatus going.

Most recently, a draft of the Republicans passed the House of Representatives for a temporary budget, which would have been ensured by the funding up to and including November 20. But the Senate stood across.

A meeting between Trump on Monday with the party leaders from both congress chambers showed no breakthrough. The minority leader of the Democrats in the House of Representatives, Hakeem Jeffries, then said that “significant and significant” differences remained even after the conversation. For this reason, Mike Johnson, majority leader of the Republicans in the House of Representatives, referred to a transitional budget that would give both parties more time. The Democrats want to use the deadline to increase the pressure on the Republicans and thus enforce their demands.

What is a central point of dispute?

The Democrats’ focus is primarily on the health sector, in which they demand that the recesses take back the recesses in the pension program for weak people (Medicaid).

These were part of Trump’s Great Tax Act – and that is exactly what the US President should annoy if he had to reject the first points a few months after the adoption. He assumes that the Democrats want to spend millions of health care for migrants who were illegally in the country and described the claims as “ridiculous”.

Senator Patty Murray condemned this representation as one of several democrats. According to the plans of the Democrats, migrants without a valid residence permit would not be entitled to such benefits and should not receive the “New York Times”.

Would a “shutdown” also be possible in Germany?

If there is no federal budget in Germany at the beginning of a budget year, the so -called preliminary housekeeping comes into play. It is stipulated in the Basic Law and is intended to ensure that the federal government remains capable of action. “All fixed services, such as the pension, child benefit or BAföG, continue to be paid out,” says the Federal Government. This also ensures already promised financing such as military aid to Ukraine. However, new expenses would only be possible to a limited extent – if they are “factual and inevitable”.

The preliminary budget management will take action after Bundestag elections, for example if a government has to be reorganized and therefore the adoption of the new budget will be postponed to the coming year.