Explained: why Washington can’t stop the cycle of shutdown threats
The US government is staring down the barrel of a shutdown deadline, a drama Americans have seen play out time and again for nearly half a century.
Since the 1980s, Congress has triggered 14 major shutdowns, nearly always because deep divisions over how to spend taxpayer dollars spill over into last-minute stalemates.
This isn’t new territory; from battles over healthcare and social services in the Carter years to the record-breaking impasse over border funding in 2018–2019, these shutdowns have become a recurring ritual in Washington’s relentless partisan tug-of-war.
Why shutdowns keep happening in the United States?
The US government shutdown tradition hinges on a critical date: October 1, the start of the federal government’s fiscal year.
Congress must pass a series of 12 annual spending bills to authorize government operations before that date.
If they don’t, the government loses its legal authority to spend money, forcing a partial shutdown.
This deadline has become the focal point of recurring political standoffs stretching back to the 1980s, when the first shutdowns under this system emerged.
Shutdowns happen because budget negotiations often get caught in partisan battles.
Republicans and Democrats spar over funding priorities, from social programs and healthcare to border security and defense. Neither side wants to concede ground hastily, turning the October 1 deadline into a high-stakes showdown.
When Congress can’t pass full appropriations or even temporary continuing resolutions by that date, government agencies that aren’t essential close their doors, and federal workers are furloughed.
This cycle repeats because the structure of budget-making demands consensus on many contentious issues, yet growing political polarization makes compromise harder.
The 2018–2019 shutdown, the longest in history, showed how deep these divisions run, with President Trump and Congress deadlocked over border wall funding.
And now, despite warnings and the damage caused by past shutdowns, the US faces yet another October 1 deadline fraught with similar partisan disagreements, showing just how entrenched this shutdown pattern has become in American politics.
Government shutdown highlights ‘political dysfunction’
When the government shuts down, it’s more than just a headline; it hits people where it hurts.
Thousands of federal employees suddenly find themselves without a paycheck, worried about bills and groceries.
Sure, many get paid back later, but that gap can turn life upside down for families.
Then there’s the everyday fallout: national parks close, tourists scattered; passport offices back up; and those important economic reports that businesses and investors rely on go on pause.
The government shutdown impacts markets globally, and according to Nigel Green, CEO of deVere Group, cracks are already visible:
Gold prices have already surged to record highs as investors move into safe-haven assets. Treasury yields are oscillating, with history pointing to declines during shutdowns, but the political rancour and concerns over debt could push them higher this time. The US dollar, which remains the global reserve currency, is vulnerable to shifts in confidence.
Green further added that shutdowns are not the same as defaults, but they send a damaging signal about political dysfunction in the world’s largest economy.
It’s a reminder that political battles can quickly become everyday struggles for millions of Americans, people who depend on steady government support and services to keep their lives running smoothly.
The post Explained: why Washington can’t stop the cycle of shutdown threats appeared first on Invezz
Read More
Trump’s pharma tariffs: why they’ll hit Europe and Asia differently
Evening digest: Hamas on Trump’s plan, US govt shutdown, Europe-Russia tensions
Explained: why Washington can’t stop the cycle of shutdown threats
The US government is staring down the barrel of a shutdown deadline, a drama Americans have seen play out time and again for nearly half a century.
Since the 1980s, Congress has triggered 14 major shutdowns, nearly always because deep divisions over how to spend taxpayer dollars spill over into last-minute stalemates.
This isn’t new territory; from battles over healthcare and social services in the Carter years to the record-breaking impasse over border funding in 2018–2019, these shutdowns have become a recurring ritual in Washington’s relentless partisan tug-of-war.
Why shutdowns keep happening in the United States?
The US government shutdown tradition hinges on a critical date: October 1, the start of the federal government’s fiscal year.
Congress must pass a series of 12 annual spending bills to authorize government operations before that date.
If they don’t, the government loses its legal authority to spend money, forcing a partial shutdown.
This deadline has become the focal point of recurring political standoffs stretching back to the 1980s, when the first shutdowns under this system emerged.
Shutdowns happen because budget negotiations often get caught in partisan battles.
Republicans and Democrats spar over funding priorities, from social programs and healthcare to border security and defense. Neither side wants to concede ground hastily, turning the October 1 deadline into a high-stakes showdown.
When Congress can’t pass full appropriations or even temporary continuing resolutions by that date, government agencies that aren’t essential close their doors, and federal workers are furloughed.
This cycle repeats because the structure of budget-making demands consensus on many contentious issues, yet growing political polarization makes compromise harder.
The 2018–2019 shutdown, the longest in history, showed how deep these divisions run, with President Trump and Congress deadlocked over border wall funding.
And now, despite warnings and the damage caused by past shutdowns, the US faces yet another October 1 deadline fraught with similar partisan disagreements, showing just how entrenched this shutdown pattern has become in American politics.
Government shutdown highlights ‘political dysfunction’
When the government shuts down, it’s more than just a headline; it hits people where it hurts.
Thousands of federal employees suddenly find themselves without a paycheck, worried about bills and groceries.
Sure, many get paid back later, but that gap can turn life upside down for families.
Then there’s the everyday fallout: national parks close, tourists scattered; passport offices back up; and those important economic reports that businesses and investors rely on go on pause.
The government shutdown impacts markets globally, and according to Nigel Green, CEO of deVere Group, cracks are already visible:
Gold prices have already surged to record highs as investors move into safe-haven assets. Treasury yields are oscillating, with history pointing to declines during shutdowns, but the political rancour and concerns over debt could push them higher this time. The US dollar, which remains the global reserve currency, is vulnerable to shifts in confidence.
Green further added that shutdowns are not the same as defaults, but they send a damaging signal about political dysfunction in the world’s largest economy.
It’s a reminder that political battles can quickly become everyday struggles for millions of Americans, people who depend on steady government support and services to keep their lives running smoothly.
The post Explained: why Washington can’t stop the cycle of shutdown threats appeared first on Invezz
Read More
Trump’s pharma tariffs: why they’ll hit Europe and Asia differently