Shutdown in the USA: What are the consequences for the Americans?

Democrats and Republicans argued about a transitional budget until shortly before the end of the period, in the end they could not get together: the USA has been back in a shutdown for the first time since 2019 – a partial standstill of government transactions. The positions of the two parties were too far apart, which is why it was hardly expected that at least a temporary solution would be found in the last hours before the end of the fiscal year.

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

The American parliament – the congress – often only agrees on a draft at the very last moment and often moves from one transitional budget to the next. Therefore, there was hope until the end that Republicans and Democrats might still agree on bridge financing. But that didn’t happen.

On Tuesday evening (local time), the US Senate wrested a transitional budget one last time before the end of the deadline. A republican bill received 55 out of 100 of the votes in the Congress Chamber-60. The party of US President Donald Trump has only a short majority in the Senate and is therefore dependent on the support of the democrats. But that didn’t come. A democratic proposal had previously failed.

After the failure of the advance, no further coordination was planned for the evening – and it was clear: the shutdown comes. The US budgetary office (OMB) then indicated affected federal authorities to implement their plans for an “orderly” decommissioning of government transactions. Government employees should appear regardless of this on their next regular shift.

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.

Not an institutions regarded as a systematic institution must close or send their employees on forced vacation. Several government employees would initially no longer receive a salary, but which will be paid retrospectively afterwards. Like many Americans, many of them live from salary check to salary check, have no large reserves. For subcontractors who work on behalf of the government, an additional payment is not guaranteed.

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

The adoption of the household regularly ensures bitter political arguments in the United States, in which all possible topics come on the table. This time, the focus is on health policy. Among other things, the Democrats require the withdrawal of cuts in the Medicaid state pension program for low -income people. These cuts were part of Trump’s Great Tax Act – and the Republicans don’t want to soften that quickly.

They try to direct the conflict to migration and claim-according to fact checks of several US media without the basis-that Democrats wanted to plan federal funds for health care for people without valid papers. The Democrats clearly reject this and emphasize that there is no single dollar to these people. In their view, it is rather the Republicans who accept a shutdown with false claims.

It is unclear how long the USA will stay in shutdown mode-the congress has to reach an agreement, but the fronts seem hardened. 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.

The Senate is once again aiming for votes. The House of Representatives – the other Chamber of Parliament – would not actually meet this week. In view of the circumstances, this could happen unscheduled. A draft law must be approved by both chambers before it is presented to US President Donald Trump for signing.

The head of the US budget, Russell Vougt, said further instructions would follow as soon as Trump had signed a law to provide funds. VOUGHT is considered an important string puller in the Trump government. According to the US media, his authority had already targeted 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.

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 -can also be affected: In a letter to the party leaders in the congress, the US travel association warned of flight delays and dumps. 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 recently assumed that the White House has classified an authority responsible for labor market statistics as not systemically relevant and that it would have to put down 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.

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”.