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Editor | L.Y.

Preliminary

Early on October 1, the U.S. federal government said about 750,000 employees lost their dishes overnight.

This is the second shutdown in seven years, but this time Trump plays seriously, threatening to come with "permanent major cuts", breaking the practice of still returning to work after the previous shutdown.

Is Trump serious this time? Who will pay for this farce?

The federal fiscal year began on October 1st, and Congress should have passed 12 regulatory funding bills to ensure operation, but the two parties fell into a crackdown on health insurance subsidies, foreign aid and immigration law enforcement funding at the beginning of the year, leading to a full stagnation in regulatory funding discussions.

Congress adjourned for nearly three weeks in September, compressing negotiations to the last three days of the month, and the White House suddenly ordered agencies to prepare for "layoffs" on September 25 instead of the usual unpaid leave, further reducing the room for compromise. As of Oct. 5, the fifth day of the shutdown, substantive negotiations had not resumed on Capitol Hill, and mutual accusations by spokesmen of both parties in the media became a daily routine.

Breaking the face.

On October 2, the shutdown entered its second day. Trump's statement in the Oval Office of the White House broke the "tacit rule" of previous closures. He made it clear that he would meet with Russell Walter, director of the White House Office of Management and Budget, with the goal of abolishing "institutions that are inconsistent with the values of this administration and waste taxpayer money" and bluntly firing employees "from Democratic institutions." This statement is in sharp contrast to the previous practice of "resuming work and repaying" after the shutdown and is interpreted as a clear signal of "permanent layoffs."

White House spokesman Levitt further revealed that the first redundancy plans could involve thousands of people, and the specific lists will be drawn up by the Watt team between October 1 and 3. This operation is directed at the core of the U.S. government¡¯s personnel system ¨C the ¡°RIF¡± mechanism usually only starts when the agency is removed or funding is permanently cut, and once implemented, the dismissal will be completely canceled, and employees can not return to work as before after the shutdown. Internal documents obtained by the federal show that the Health Insurance Administration, the Environmental Protection Agency and other agencies have been listed as the ¡°Democratic position¡± agencies by the Republican Party.

Trump's tough stance has a clear intention of pressure. He wrote on social media on October 4: "It was the Democrats who shut down the government, and they are responsible for the layoffs."

This strategy of shifting the blame to the opponent tries to take the initiative in the public opinion field, but a number of polls show that 58% of the respondents believe that both parties should be responsible for the shutdown, and only 22% blame the Democratic Party alone. What is more noteworthy is that Trump's first presidential term triggered a five-week shutdown, when more than 800,000 employees were affected, and this superimposed threat of layoffs plunged the federal employee group into unprecedented panic.

People's livelihood pains

On the morning of 5 October, a crowd of protesters appeared under the federal office building in Washington, D.C. Mary Hansen, a 48-year-old Social Security Agency employee with the badge ¡°work for bread¡±, her husband was a federal prison guard, both of whom belonged to the ¡°necessary services¡± personnel, but to face the coming of the loan repayment day to stop relying on our credit card, this time if dismissed, really don¡¯t know how to live.¡±

The breakdown in public services was apparent on the fifth day.The National Park Administration closed 85% of parks across the United States, Yellowstone Park campgrounds were cleared and only emergency rescue forces were retained; the Food and Drug Administration suspended non-emergency drug approvals, and approximately 300 new drugs were on the market; and the Ministry of Agriculture¡¯s food vouchers project faced exhaustion, with an estimated 320 million pregnant women and children unable to receive subsidies on time by mid-October.

Housing and Urban Development Department rental aid delays, low-income families in cities such as New York and Los Angeles have been notified by landlords, local governments have been forced to pay for maintenance of basic services, and fiscal pressure has risen.

The chain reaction in the private sector is also spreading. Federal government contractors bear the brunt. An IT services company in Virginia has laid off 200 employees because the government shutdown prevented a $30 million contract payment from being settled. Although the airline has not experienced major delays, the fatigue of air traffic controllers has caused safety concerns, and the pilots 'association has issued an early warning of "potential risk escalation." Economists estimate that the direct economic losses caused by the shutdown are about US$180 million per day. If it lasts for two weeks, the losses will exceed US$2.5 billion, far exceeding the US$1.1 billion loss caused by the 16-day shutdown during the Obama era in 2013.

Future Puzzle under Political Polarization

On the fifth day of the shutdown, there is still no sign of loosening the positions of the two parties. Senate Republican Leader John Thun insisted on passing a "clean" interim appropriations bill, which would not tie any medical insurance or policy provisions and would only extend funding until November 21; Democratic Leader Chuck Schumer insisted that "health protection is not tradeable", refused to compromise on the extension of medical insurance subsidies, and accused the Republican Party of "using the budget to kidnap low-income groups." The channels of communication between the two sides were almost completely broken, and the scheduled meeting of leaders of the two parties on October 4 was suddenly cancelled by the White House, further exacerbating the deadlock.

According to historical experience, short-term shutdowns through emergency temporary allocations are a likely event. Since the 1970s, the U.S. government has been shutdowns 20 times due to differences in allocations, most of which have ended in days to two weeks by passing temporary bills.

The general opinion is that when the economic losses and public opinion pressure caused by the shutdown reach a critical point, intermediate lawmakers will push for a compromise, Republicans may make a symbolic concession on health insurance subsidies, and Democrats accept the ¡°open-door-after-talk¡± scheme. But this overlap threatens to cut, and the cost of the compromise is significantly increased ¨C if Trump really implements permanent cuts, even subsequent allocations are in place, the damaged administrative system will be difficult to quickly recover.

conclusion

The shutdown exposed fundamental flaws in the U.S. budget process: regular funding became a party play tool, temporary funding became ¡°normal,¡± and Trump¡¯s threat of cuts further politicized the administration. On October 5, the U.S. Chamber of Commerce issued a statement warning that government shutdown and cuts would ¡°seriously damage the U.S. business environment and administrative efficiency,¡± and Standard Poor said that he was closely watching developments and did not rule out the possibility of lowering the U.S. sovereign credit rating.

By the evening of October 5, the night sky in Washington was still quiet, but the crisis of the federal government¡¯s downturn was far from over. The livelihoods of 750,000 employees, the welfare of millions of families, and the stability of the U.S. economy hanged on top of the two-party negotiations.

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