Source: Xinhua News Agency
Beijing News Agency October 4The U.S. Senate failed to pass the new provisional allocation bill on the 3rd, the Democratic and Republican proposals were again vetoed, and the federal government continued to "stop".Since the "stop" on the 1st, a large number of federal employees have been forced to suspend paid leave, economic data release was suspended, a number of public services fell into stagnation, the U.S. economy will suffer direct losses, and the negative impact of the government's "shutdown" on the U.S. is gradually emerging.
Hundreds of thousands of federal employees are on leave without pay
According to Reuters, about 750,000 federal employees were forced to suspend their paid leave due to government shutdowns, while other personnel, such as the military and border patrols, were temporarily "unpaid".
US Vice President Vance warned on the 1st that if the federal government's "shutdown" lasts for a long time, it may trigger layoffs. White House spokesman Levitt said that federal layoffs are "likely" to happen and will happen "soon".
According to internal letters seen by Reuters, the U.S. Department of Commerce's Office of Patents and Trademarks plans to cut 1% of its 14,000 employees.
Most of the employees of several major financial regulators in the U.S. were also forced to take "paid leave" from the first day.
According to Reuters, the U.S. Securities and Exchange Commission will force more than 90 percent of its employees to suspend pay and leave only about 393 employees to deal with emergency law enforcement and market surveillance.
The U.S. Commodity Futures Trading Commission said on the evening of September 30 that only 5.7% of the agency’s 543 employees remained in office during the “stop-up” period, ensuring that the committee continues to perform functions such as market surveillance and fraud prevention.
Due to differences between the Republican and Democratic parties on medical-related welfare spending, the U.S. Senate failed to pass a new interim appropriations bill on September 30 before government funds were exhausted. Starting from 0:00 on October 1, the federal government "shut down" again in nearly seven years. The two parties pass the blame for this.
Important economic data suspended
Due to the federal government's "stagnation", the U.S. Bureau of Labor Statistics failed to publish the monthly employment data statistics report as planned on the 3rd.
The Bureau of Labor Statistics, a subsidiary of the Department of Labor, is the official core statistical agency in the United States. During the government's "shutdown" period, the Bureau of Labor Statistics stopped releasing data reports and also stopped data collection. The release of a number of important statistical data for which the agency is responsible will be affected, including key inflation data such as the consumer price index originally scheduled to be released in mid-October.
According to US media reports, the data statistics work of the Census Bureau and the Economic Analysis Bureau under the US Department of Commerce has also been affected by the "shutdown".
Economic analysts believe that the United States is currently facing a complex economic situation of weak employment and stubborn inflation, and the "stop" of important data statistics will affect the U.S. Federal Reserve to determine whether the economy needs stimulus.
"In such a critical period, declining data can make understanding the economy more difficult," said Martha Kimbell, a former senior adviser to the White House Council of Economic Advisers during the Biden administration. Gregory Darko, chief economist at Ernst & Young Bozhron, said that "flying blindly in thick fog" is very dangerous.
Several public services are stagnant or under pressure
After the federal government's "shutdown", in Washington, D.C., landmark buildings such as the Washington Monument and the Capitol have been closed to the public, and many tourists have shouted "disappointment" because their itineraries have been disrupted. Attractions such as the Liberty Bell in Philadelphia, Pennsylvania, and Vicksburg National Military Park in Mississippi have been closed. The Smithsonian Institution, which operates several museums, will use the remaining funds of the previous year to remain open until the 6th.
According to the Associated Press, this "shutdown" caused about two-thirds of the employees of the National Park Service to be forced to take unpaid vacation. The agency manages more than 400 attractions. According to the emergency plan released by the Park Administration later on September 30th, park roads, observation decks, trails and open-air memorial sites will basically remain open to tourists, but parks lacking "passable areas" will be closed. If park resources are damaged or garbage accumulates, the open areas may also be closed.
Aviation industry groups urged the U.S. government to break the budget impasse as soon as possible, warning that the government's "stop" is putting pressure on air travel.
According to the U.S. Department of Transportation’s plans, more than 11,000 of the Federal Aviation Administration’s more than 44,000 employees have been forced to take paid leave, while more than 13,000 U.S. air traffic controllers and thousands of other key security jobs have been temporarily “unpaid.”
According to the Associated Press, the U.S. Transportation Safety Agency and the Federal Aviation Administration are currently facing staff shortages.If the number of booked flights makes it difficult for the system to cope, the Federal Aviation Agency will have to slow the flight's take-off pace, resulting in more flights being delayed or cancelled.
Moreover, the U.S. Department of Health and Public Services said more than 3,2 thousand of its 80,000 employees would be forced on leave during the government's "stop" period, with critical functions including public health information disclosure, contractor regulation, medical research, etc. facing severe disruption, in addition to a handful of projects.
Every “stop” a week or losing $7 billion
The U.S. Congressional Budget Office estimates that the U.S. federal government’s 35-day “stop” from the end of 2018 to the beginning of 2019 has caused a loss of $3 billion in gross domestic product (GDP).
Goldman Sachs previously estimated that economic growth would drop by about 0.15 percentage points every week of the government's "stop" and 0.2 percentage points if private institutions were affected. The UK-based accounting firm Aung San Suu Kyi predicted at the end of September that every week of the government's "stop" would cause about $7 billion in losses to the U.S. economy.
In addition, some industries will be severely affected by the "shutdown". Jeff Freeman, CEO of the American Tourism Association, said a one-week "shutdown" would cost the tourism industry $1 billion. The National Park Conservancy estimates that national parks were closed during the "shutdown" period, losing $1 million in ticket revenue a day, and surrounding merchants lost $77 million a day.
Michael Ferroli, chief economist at JPMorgan’s U.S., pointed out that the continued government “stop” will not only affect economic productivity, but may also affect market sentiment. In terms of employment, due to the threat of job cuts and actual unemployment, the “stop” may pose risks to labor markets and consumer spending.