In mid-November, President Joe Biden signed into law a so-called laddered continuing resolution (CR). As with normal CRs, this bill continued the funding covered by the 12 appropriations bills at the prior year’s levels. Unlike a normal CR, however, it staggered when funding for different portions of government runs out. Absent additional appropriations, funding for programs in the following four of the 12 appropriations bills will lapse on January 20, leading to a partial government shutdown (with the remaining eight bills set to lapse on February 3):
- Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
- Energy and Water Development and Related Agencies
- Military Construction, Veterans Affairs, and Related Agencies
- Transportation, Housing and Urban Development, and Related Agencies
And while Congress is debating passing another laddered CR to continue funding for these four bills until March 2, with the remaining eight funded until March 9, programs covered by these bills would regardless once again soon be in danger.
The impact of a federal shutdown varies by agency, program, and how long the shutdown lasts. Nonetheless, numerous essential functions of the government halt immediately.
Here are five immediate effects of a partial shutdown covering these four bills.
1. Many fair housing activities will cease
The U.S. Department of Housing and Urban Development (HUD) oversees important activities working to “eliminate housing discrimination, promote economic opportunity, and achieve diverse, inclusive communities,” in an effort to promote fair housing and equal opportunity. Working with the U.S. Department of Justice (DOJ), HUD oversees enforcement of the Fair Housing Act and other housing rights legislation. These laws make illegal a swath of housing discrimination based on protected classes such as race, sex (including sexual orientation and gender identity), disability, marital status, religion, and national origin.
However, during a shutdown, nearly all of HUD’s federal fair housing activities, including its anti-discrimination enforcement—all run by the Office of Fair Housing and Equal Opportunity—would lapse; any activities conducted by state or local governments would continue, as would the DOJ’s activity because its funding would be ongoing. With approximately 99 percent of the Office of Fair Housing and Equal Opportunity furloughed, there would be a near total cessation of the office’s programs, such as the Fair Housing Organization Initiative and the Education and Outreach Initiative. Without them, already vulnerable communities would not have access to federal assistance dedicated to resolving housing complaints, likely leading to individuals experiencing higher rates of housing discrimination—a persistent problem in the United States.
2. Housing loan assistance for Native American veterans will pause
The Native American Direct Loan program offers loan assistance to provide more flexible and affordable paths to homeownership for veterans if they or their spouse are Native American. In most cases, qualified buyers can avoid down payments, forgo private mortgage insurance and most closing costs, and get very low interest rates on mortgages. During a shutdown, new loan making will immediately cease. Without this benefit, Native American veterans making an offer on a home could lose out on it.
3. Rural development will grind to a halt
The U.S. Department of Agriculture (USDA) seeks to improve life in rural America through a series of grants, loans, and loan guarantees. This can come in the form of housing and health care; in water and wastewater infrastructure, electricity infrastructure, and communications infrastructure; and in first responder services and equipment.
During a lapse in the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies appropriations bill, a number of these functions would immediately halt. According to the USDA, “No loans or assistance for essential community facilities would be made, delaying the financing of health care, emergency response, and other essential services to rural communities. … No loans or grants would be made or issued for modernizing rural America’s utilities infrastructure. Borrowers or grantees would not be able to improve service or pay off short-term bridge loans.”
4. Many legal services for and provided by the VA will cease
The Office of General Council (OGC) exists to serve the legal needs of the U.S. Department of Veterans Affairs (VA) and ensure the faithful execution of laws and policies serving veterans. Within the OGC are subject-specific groups with attorneys specializing on topics such as benefits, health care, revenue, and torts.
During a lapse, legal services provided by the OGC, not including exempt matters, would cease. Veterans would be left without interpretation of legal matters and counsel on adjudications of tort claims.
5. More than 100,000 federal workers will go without pay
More than 4 million people are directly employed by the federal government, with more than half of them civilians, and millions more are employed indirectly through federal contracts. They include employees in Social Security offices, food safety inspectors, and doctors who work for the National Institutes of Health, as well as the service contract workers, many of whom are people of color with limited financial means, who clean and maintain federal office buildings. With the exception of a very small minority of workers whose pay comes from mandatory funding, the funding to compensate federal employees comes through the annual appropriations process.
Under a January 20 partial shutdown, more than 100,000 employees will go without pay. This will happen regardless of whether they are working or furloughed—for any new work after January 20 or days furloughed during the shutdown. And while a 2019 law ensures that direct federal employees will ultimately receive back pay when the shutdown ends, regardless of whether or not they were furloughed, many households cannot afford to miss a paycheck—and workers who contract directly with the federal government enjoy no such protections and are unlikely to be made whole. This problem will only grow over time, with the remainder of the 12 appropriations bills lapsing on February 3, leaving millions more workers, including 1.3 million active duty service members, without pay.
Conclusion
While some harms start immediately, the damaging effects of a shutdown grow immensely over time, as contingency funds run out, grants expire, and some states and local governments grow increasingly unable to advance the money to run joint federal-state programs. The U.S. House of Representatives should work to enact funding bills consistent with the budget deal and keep the government open. The government is supposed to work for the American people, and it cannot do so when it’s shuttered.
The authors would like to thank Jean Ross, Lily Roberts, Laura Rodriguez, Alan Yu, Allison McManus, Rudy deLeon, Laura Kilbury, and Mariam Rashid for helpful suggestions and Kennedy Andara for research assistance.