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Explained: Why Trump has signed a stopgap funding bill into law

Had Trump not signed the bill into law late on Friday night, it would have led to a government shutdown.

By: Explained Desk | New Delhi | Updated: December 20, 2020 2:14:23 pm
joe biden, US government shutdown, US congress stimulus package, us congress stimulus deal,US President Donald Trump.

On Friday, US President Donald Trump signed into law a stopgap funding bill that gives lawmakers two additional days over the weekend to sort out a few issues in the ongoing negotiations about the $900 billion pandemic aid package.

The move is a part of a continuing resolution to extend federal funding deadlines. On December 9, the House passed a one-week stopgap spending bill, which was supposed to expire on Friday midnight. After Trump signed it into law yesterday, the new expiration for federal funding to stop is Sunday midnight, before which the coronavirus relief negotiations are expected to conclude. Had Trump not signed the bill into law late on Friday night, it would have led to a government shutdown.

What does this mean?

The stopgap funding bill has been passed so that the government does not run out of its existing funds meant to run federal programs for which the deadline was Friday midnight. This means that the existing funding with the government will now run for two more days till Sunday midnight by when negotiators are expected to reach an agreement with regards to the COVID-19 relief package, which includes the continuation of unemployment benefits for millions of Americans and funding for small businesses.

But what does it mean for federal funding to expire?

During a fiscal year, which begins on October 1, Congress passes 12 annual appropriation acts, which provide the budget authority to obligate and expend funds from the US Treasury for specific purposes. These annual appropriations are available for a specified fiscal year and after the year ends, these funds can no longer be used to address new obligations. In other words, after the specified deadline, the funds expire.

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What does a government shutdown mean?

A government shutdown happens when Congress fails to fund the government, in which case the latter stops all non-essential services, while essential services such as the armed forces and police departments etc. continue to function.

According to a Q&A published by the Committee for a Responsible Budget (CRFB), since Congress introduced the modern budget process in 1976, there have been 20 “funding gaps”. CRFB notes that overall, there have been four “true” government shutdowns, including two that happened between 1995-1996.

Typically, such a shutdown is a result of a disagreement between the president and Congress about full-year or interim funding, as a result of which certain activities and programs of the government may need to stop.

The longest government shutdown happened under the Trump administration when the government was shut down for 35 days between December 2018 and February 2019. This shutdown arose from a dispute over the border wall funding.

In the present negotiations, a sticking point is the Republican demand that the Federal Reserve not restart some pandemic relief measures including funding for small businesses and aid for state and local governments, The New York Times reported.

How does a government shutdown affect the public?

In the past, government shutdowns have resulted in furloughs for several hundred thousand government employees, required cessation or reduction of government activities and affected various sectors of the economy, Congressional Research Service (CRS) notes.

As per CRFB, in prior shutdowns, services such as border protection, medical care, air traffic control, law enforcement and maintenance of power grids were classified as essential activities.

However, despite this, other government programs such as social security and medicare, health and human services and national parks may be affected. For instance, during the 1995-1996 shutdown, over 10,000 medicare applicants were turned away temporarily.

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