The president Donald Trump signed a law on Wednesday 12 November that puts an end to the longer shutdown in the history of the United States, which lasted 43 days, declaring that “It should never happen again.” The suspension resulted in the temporary closure of federal government operations. A few hours earlier, the House of Representativescontrolled by Republicans, had approved the package with 222 votes in favor and 209 against. Trump’s support has largely kept the party united in the face of opposition Democratsangered that the long stalemate that began in the Senate failed to secure an agreement to extend the federal subsidies for health insurance.
Trump’s signature on the bill, passed by Senate at the beginning of the week, will allow the federal employees placed on forced leave by the shutdown of 43 days to return to work today, although it is unclear how quickly federal services and activities will resume at full capacity. “We can never allow this again for something like this to happen”, Trump declared in the Oval Office during the signing ceremony: the end of the shutdown offers hope that i essential services have some time to recover, but the inconveniences for citizens have been real.
The economic burden of the shutdown: the impact on the USA
The longest shutdown in the history of the United States seems to be nearing the end, but not without leaving a mark on an already struggling economy. About 1.25 million federal employees have not been paid since October 1st, thousands of flights have been cancelled, the assignment of government contracts has slowed down and some citizens have had to deal with the interruption of food aid.
Some of the lost economic activity will be recovered with the reopening, as federal employees will receive back pay: at the same time, however canceled flights they will not be rescheduled, i uneaten meals in restaurants will not be recovered and some postponed purchases they will probably no longer be carried out. According to analysts, short-term shutdowns usually leave no trace in economic data, but this one could a lasting markboth for its record duration and for the growing inconveniences. The University of Michigan’s monthly consumer confidence index fell to near a record low in November.
The shutdown, in fact, adds to the existing economic challengesincluding weak job growth, high inflation and tariffs imposed by President Donald Trump, which have created uncertainty for many businesses. The effect was felt especially in the capital area Washington DCalready in difficulty due to the cuts to federal staff carried out by Trump last spring.
The suspension of federal activities also affected the aviation sector, because the civil aviation system is largely managed by a federal agency, the Federal Aviation Administration (FAA). Airlines had to cancel thousands of flights on orders from the FAA, which was trying to lighten the workload of the flight controllerswhich are not paid until the shutdown ends. Even before these cancellations, the consultancy firm Tourism Economics had estimated that the shutdown would reduced travel spending of 63 million dollars per day, with an overall loss of 2.6 billion dollars for the entire tourism sector in six weeks; Canceled flights also mean less business for hotels, restaurants and taxi drivers.
Finally, the shutdown has delayed the payment of 8 billion dollars in monthly food subsidiesprovided through the Snap program, creating serious financial difficulties for many low-income families and reducing their spending capacity. Some states have managed to pay full benefits for this month, as the Trump administration sought to suspend or reduce Snap payments for beneficiaries.
Why does the shutdown also have consequences abroad and what are they?
Bearing in mind the centrality of the United States in global balances, a shutdown of federal activities can have serious consequences much of the world. In the first instance, the shutdown further undermines the United States’ position as global leader of the free market and international order. Accompanied by China’s rise, this suspension further weakens investor confidence in the United States as the arbiter and enabler of commercial and financial system. Additionally, while many national security-related functions are exempt from the shutdown, i Departments of Defense and State are among those who suspend the greatest number of workers.
A functioning U.S. government is critical to the commercial and economic interests of the country and its allies. For example, the shutdown affected the Germanywhere numerous American military bases are located. During the blockade, Berlin had to pay the salaries of approximately 11,000 local workersmainly German citizens, who support US troop operations, with the promise that Washington will refund then the sum. The situation has also generated concerns at a local level, especially in the region of Rhineland-Palatinatedue to possible rent delays and impacts on the real estate market and activities related to military personnel.
