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[size=36]What does the "American closure" mean? What is its impact on the economy?[/size]
10:39 - 22/12/2018
Mawazine News
Many US federal departments have entered the "partial government closure" phase by mid-Friday Friday, local time for Washington, or around 5 am Saturday, GMT, where government ministries, with the exception of vital services, will stop providing services.
Because of the refusal of Democratic lawmakers to approve President Donald Trump's project to build a wall along the border with Mexico, dozens of federal ministries and departments will not be able to open their doors on Saturday, and hundreds of thousands of their employees will be forced to take unpaid leave or work without pay Throughout the closure period.
Full and partial closure
Normally, the closure occurs when the US Congress fails to reach agreement on a budget for the next fiscal year.
This time, Congress was to pass 12 laws to end the funding crisis of a number of federal ministries, departments and bodies, to be submitted to the President for signature.
Laws are often not approved on time, leading to the risk of widening and widening the funding gap. Sometimes the gap can be bridged by special procedures, but at other times this does not happen.
Since 1981, funding gaps have led to closures of up to 12 closures, two of which were longest, the first under former President Bill Clinton in late 1995 and early 1996, and continued for 26 days after colliding with the Republicans in Congress who decided Reduce the level of spending.
The same happened in the era of Barack Obama in 2013, when Republicans and Democrats failed to agree on spending levels, resulting in a 16-day closure.
The last fiscal year began on October 1, approving five laws out of 12 laws: financing the defense, water and energy budget, financing the legislative branch, military installations and pensioners' affairs, financing ministries of labor, education and health, and finally financing health and human services.
Thus, after the closure actually begins today, it will affect the rest of the laws, that is 7 out of 12 laws to be ratified.
What services and how many staff will be affected?
First, four federal institutions and agencies will be frozen until they pass and ratify laws. These non-essential bodies are the National Parks Authority, the Environmental and Food Inspection Commission and the Income Tax Authority. Social security and health services may also be affected.
Employees in these institutions will have to take long unpaid leave during the government closure phase, meaning they will not go to work and will not be paid.
In 2013, when the closure occurred, 759,000 government employees, or about 40 percent of the workforce, were forced to take unpaid leave.
This time around 380,000 government employees are expected to be forced to take unpaid leave, according to the Financial Times.
Personnel such as border guards, hospitals, traffic control, police, mail, army and power stations will continue to operate normally.
In addition, some 420,000 employees will have to work without pay or pay during the closure period.
Impact on the economy and markets
Donald Trump's insistence on "fighting" to finance the construction of the barrier on the Mexican border has already affected global financial markets, while US stock markets fell heavily on Thursday and Friday, affected by news of the closures.
Experts believe that the real financial impact of partial closure will be limited, although it depends on the length of that closure.
During the Clinton closure, the closure lasted 26 days between November 1995 and January 1996 and cost the US government about $ 1.4 billion, of which $ 1.1 billion in salaries were paid to federal employees who remained at home without work, The rest are loss of revenue due to the closure of national parks and public museums.
Experts estimated the losses from the closure in 2013, under Obama, about 0.2 percent of US gross domestic product.
With the current closure, experts estimate it will cost about $ 1.2 billion per week, if it lasts more than a week.
Many US federal departments have entered the "partial government closure" phase by mid-Friday Friday, local time for Washington, or around 5 am Saturday, GMT, where government ministries, with the exception of vital services, will stop providing services.
Because of the refusal of Democratic lawmakers to approve President Donald Trump's project to build a wall along the border with Mexico, dozens of federal ministries and departments will not be able to open their doors on Saturday, and hundreds of thousands of their employees will be forced to take unpaid leave or work without pay Throughout the closure period.
Full and partial closure
Normally, the closure occurs when the US Congress fails to reach agreement on a budget for the next fiscal year.
This time, Congress was to pass 12 laws to end the funding crisis of a number of federal ministries, departments and bodies, to be submitted to the President for signature.
Laws are often not approved on time, leading to the risk of widening and widening the funding gap. Sometimes the gap can be bridged by special procedures, but at other times this does not happen.
Since 1981, funding gaps have led to closures of up to 12 closures, two of which were longest, the first under former President Bill Clinton in late 1995 and early 1996, and continued for 26 days after colliding with the Republicans in Congress who decided Reduce the level of spending.
The same happened in the era of Barack Obama in 2013, when Republicans and Democrats failed to agree on spending levels, resulting in a 16-day closure.
The last fiscal year began on October 1, approving five laws out of 12 laws: financing the defense, water and energy budget, financing the legislative branch, military installations and pensioners' affairs, financing ministries of labor, education and health, and finally financing health and human services.
Thus, after the closure actually begins today, it will affect the rest of the laws, that is 7 out of 12 laws to be ratified.
What services and how many staff will be affected?
First, four federal institutions and agencies will be frozen until they pass and ratify laws. These non-essential bodies are the National Parks Authority, the Environmental and Food Inspection Commission and the Income Tax Authority. Social security and health services may also be affected.
Employees in these institutions will have to take long unpaid leave during the government closure phase, meaning they will not go to work and will not be paid.
In 2013, when the closure occurred, 759,000 government employees, or about 40 percent of the workforce, were forced to take unpaid leave.
This time around 380,000 government employees are expected to be forced to take unpaid leave, according to the Financial Times.
Personnel such as border guards, hospitals, traffic control, police, mail, army and power stations will continue to operate normally.
In addition, some 420,000 employees will have to work without pay or pay during the closure period.
Impact on the economy and markets
Donald Trump's insistence on "fighting" to finance the construction of the barrier on the Mexican border has already affected global financial markets, while US stock markets fell heavily on Thursday and Friday, affected by news of the closures.
Experts believe that the real financial impact of partial closure will be limited, although it depends on the length of that closure.
During the Clinton closure, the closure lasted 26 days between November 1995 and January 1996 and cost the US government about $ 1.4 billion, of which $ 1.1 billion in salaries were paid to federal employees who remained at home without work, The rest are loss of revenue due to the closure of national parks and public museums.
Experts estimated the losses from the closure in 2013, under Obama, about 0.2 percent of US gross domestic product.
With the current closure, experts estimate it will cost about $ 1.2 billion per week, if it lasts more than a week.
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