US Government Reopens, Deep Divisions Remain After Shutdown

US Government Reopens, Deep Divisions Remain After Shutdown

The U.S. government haltingly resumed operations on Thursday after the longest shutdown in the nation's history, an impasse that disrupted air travel, cut off food aid to low-income Americans and forced more than 1 million employees to work without pay for over a month. Yet the deep political divisions that initially triggered the 43-day shutdown remain unresolved. The appropriations bill contained scant constraints on U.S. President Donald Trump’s ability to withhold outlays, with the administration having routinely challenged Congress’s constitutional authority over financial matters. It also did not address soon-to-expire healthcare subsidies, the original catalyst for Senate Democrats to initiate the shutdown. The shutdown also exposed divisions within the Democratic party: on one side, its liberal wing, which demands the leadership take all necessary measures to contain Trump; on the other, moderates who believe their options are rather limited as long as Republicans hold a majority in both houses of Congress. Senate Democratic Leader Schumer is facing calls to step down, even though he personally voted against the agreement. The White House said some 1.4 million federal employees who worked without pay during the shutdown will begin receiving back pay starting on Saturday, with all payments expected to be completed by next Wednesday, local time. Trump's White House had threatened to withhold pay from some of these workers, but there are no signs that they will do so. Trump fired thousands of employees during the shutdown, but the funding agreement to reopen the government ensured they could keep their jobs. The Trump administration has ordered agencies to rescind the firing orders within five days. The agreement suspended Trump’s broader government downsizing plan until the end of January. Under the original plan, Trump would reduce the 2.2 million-person civil service by 300,000 by the end of the year. Due to high rates of absenteeism among the nation's air traffic controllers, thousands of flights were canceled, and now, the U.S. air travel system has begun to return to normal. The Department of Homeland Security said it would issue bonus checks for $10,000 to airport security workers who worked overtime during the shutdown. The U.S. Department of Agriculture said most states would receive food aid funding for the Supplemental Nutrition Assistance Program (SNAP) within 24 hours, ending a dispute that could have cut off food purchase subsidies for 42 million Americans.

Republicans and Democrats Share the Blame

This return to normalcy may only be a brief respite, as the agreement only funds the government until January 30, leaving open the possibility of another shutdown early in the new year. Neither party seems to have emerged as a clear winner. A Reuters/Ipsos poll released on Wednesday showed 50% of Americans blamed Republicans for the shutdown, while 47% blamed Democrats. One striking feature of the shutdown was the near-total absence of one topic: debate about the $38 trillion national debt. Congress currently allows it to continue growing at a rate of about $1.8 trillion a year. Democrats obtained no guarantees on healthcare subsidies, only a promise that the Republican-controlled Senate will vote on the matter. But they believe they successfully highlighted the issue at a time when polls show Americans are increasingly concerned about rising living costs. These subsidies benefit 24 million Americans, disproportionately concentrated in Republican-controlled states. “Fighting for health care for the American people is worth it, and I’m proud that Democrats were able to stand together and stay in this fight for so long,” noted Representative Hank Johnson of Georgia. “The American people are more aware of what’s at stake.” Meanwhile, Republicans argued that the shutdown was a pointless exercise that caused unnecessary damage. This argument was made by Democrats in 2013 and 2019 when Republicans forced government shutdowns over healthcare and immigration issues. “It’s just insane, it’s insane that we now use government shutdowns as bargaining chips for policy. This can never happen again,” said Republican Representative Brian Fitzpatrick.

Economic Fallout

The shutdown caused the government to be unable to release a series of economic data, forcing investors and the Federal Reserve to operate with limited information when assessing the state of the world's largest economy. White House economic advisor Hassett said October unemployment data may never be obtained. The shutdown also hurt consumer confidence ahead of the year-end holiday shopping season. The nonpartisan Congressional Budget Office (CBO) estimated that the shutdown would delay about $50 billion in spending and shave 1.5 percentage points off U.S. GDP. The CBO said the economy would largely rebound after the shutdown ended, but as much as $14 billion in economic activity would be irretrievably lost.