With the October 1 deadline looming, is a U.S. government shutdown inevitable? And what effect would this have on the economy across various sectors? Yahoo Finance spoke to experts around the industry to determine the potential impact for businesses, air travel, healthcare, and more.
Maya MacGuineas, President of Committee for a Responsible Federal Budget, thinks that the government shutdown “is not nearly as dramatic as people expect.” MacGuineas notes that the biggest effect will be felt by nature enthusiasts as “national parks may well shut down.”
The government shutdown could have a significant impact on the air travel industry. Boyd Group International President Mike Boyd said, “The real issue is long-term. It’s the day-to-day regulation that the FAA has over airports, airlines, and also aircraft manufacturers.”
Dr. Nahid Bhadelia, Founding Director at Boston University Center for Emerging Infectious Disease, believes that the immediate impact could be felt by programs such as SNAP and WIC. Dr. Bhadelia explained, “If the shutdown continues you’re seeing the most vulnerable people at risk.”
Dr. Zeke Emanuel, Chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, broke down the immediate and long-term impact a government shutdown could have on the U.S. healthcare system. Dr. Emanuel said, “That of course is going to impact clinical research. It’s going to impact the flu and Covid. It’s going to impact the FDA’s ability to oversee various parts of their mandate including food safety.”
The government shutdown could pose a significant threat to the Federal Emergency Management Agency’s (FEMA) disaster relief operations. Former FEMA Administrator Craig Fugate explained, “Of the 5,000 workforce, that could be 90 percent of the folks at home … not supporting the disaster response teams.”
Congressional Budget Office Director Doug Holtz-Eakin explained what a government shutdown means in terms of delayed operations across various sectors. Holtz-Eakin said, “There’s just a slew of basic government services … which will interfere with the conduct of normal economic and personal affairs.”
00:00:03 – President of Committee for a Responsible Federal Budget Maya MacGuineas
00:00:26 – Boyd Group International President Mike Boyd
00:00:58 – Founding Director at Boston University Center for Emerging Infectious Disease Dr. Nahid Bhadelia
00:01:16 – Chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania Dr. Zeke Emanuel
00:01:49 – Former FEMA Administrator Craig Fugate
00:02:10 – Congressional Budget Office Director Doug Holtz-Eakin
MAYA MACGUINEAS: It’s not nearly as dramatic as people expect because most of the government’s funded not through these appropriations but through mandatory spending. And of this discretionary spending, much of it is declared to be essential, which means things still go on. So the Department of Defense will be operating. The biggest example is always– and this stinks if you’re going to a national park. But national parks may well shut down.
MIKE BOYD: Initially, air travel will be just as inconvenient as ever. We have understaffed air traffic control systems right now. And the employees know they’re going to get paid eventually. The real issues long term is the day-to-day regulation that the FAA has over airports, airlines, and also aircraft manufacturers, where Boeing won’t be able to get that inspector to take a look at that new system they want approved. Airport in Eastern Wyoming won’t be able to get an FAA inspector to come and look at the new runway. Over a period of time, that could have a hit.
NAHID BHADELIA: Health care and public health are sort of linked. And immediately, you could see if a continuing resolution is not passed, certain programs, such as SNAP or Wick, they could use carryover funds. But if the shutdown continues, you’re seeing potentially most vulnerable people at risk.
ZEKE EMANUEL: 42% of all the workers at Health and Human Services will be furloughed. That includes about 80% of the people who work at the National Institutes of Health, the NIH. That includes about 60% of the CDC and 20% of the FDA. And that, of course, is gonna impact clinical research. It’s gonna impact the ability to monitor flu and COVID. It’s gonna impact the FDA’s ability to oversee various parts of their mandate, including food safety.
CRAIG FUGATE: The biggest problem for FEMA will be all of the permanent workforce, about 5,000 employees, will be put at risk in what they call lapse of funding if the government shuts down. You know, the 5,000 workforce, that could be, you know, 90% of the folks are at home not working their jobs and not supporting the disaster response teams.
DOUG HOLTZ-EAKIN: There’s the sort of nuisance value for everybody in the United States. You can’t renew your passport. If you need flood insurance to close on your new home, you can’t get the insurance policy. You can’t close in your home. There’s just a slew of basic government services. Exporters can’t get licenses, which won’t happen and which will interfere with the conduct of normal economic and personal affairs.