With a U.S. government shutdown looming, here’s what’s at stake and what happens next

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By Sunday morning, the U.S. government could be in its 22nd shutdown of the last half-century. Such a scenario would suspend or hamper a long list of government functions, from immigration enforcement to national parks to food subsidies for low-income families.

The reason is a dispute within the Republican caucus in the House of Representatives. A relatively small number of hard-right members is demanding deep cuts to spending in exchange for voting in favour of any budget bill.

Speaker Kevin McCarthy has tried cajoling and mollifying his holdout party members, so far to no avail. “This is a whole new concept of individuals who just want to burn the whole place down,” he lamented to reporters at one point. “It doesn’t work.”

Ironically, a bipartisan majority of lawmakers likely does want to keep the government running. But making any deal with Democrats could cause Mr. McCarthy’s most right-wing members to defenestrate him. So the clock is ticking down to the moment when numerous programs will run out of money.

Here’s why this is happening and what the U.S. can expect in the coming days.

Why does the U.S. have government shutdowns?

Congress and the President must periodically approve budget bills to fund a wide range of government programs. If they don’t, the government legally can’t pay many of its employees or run many of its services and these shut down.

Since the 1970s, some legislators and presidents have periodically triggered shutdowns, or threatened to, in a bid to force the other to concede on their budget demands.

The system in Canada and other Westminster-style governments works somewhat differently: In parliamentary systems, if lawmakers vote down a budget bill, the government falls and, typically, the country faces a snap election.

What happens in a government shutdown?

Hundreds of thousands of federal government employees are furloughed, as are many more contractors. The services they run are temporarily closed. In previous shutdowns, these have included national parks, for instance, and programs that give loans to small businesses and farmers.

The longer the shutdown goes on, the more significant the effects will be. Programs that provide money for food to low-income people may still have enough in their coffers to keep operating after the deadline, but the funds will eventually dwindle. The same goes for housing subsidy programs.

Some federal workers deemed essential, such as soldiers and border guards, will still be on the job but won’t be paid. During the last shutdown, in 2018 and 2019, absenteeism rates among these employees rose, leading to slowdowns at border crossings and airports. The E-Verify system, which allows employers to check if prospective workers are undocumented migrants, also went offline.

The country’s largest social safety-net programs, Medicare (government health care for senior citizens) and Social Security (old-age pensions) are funded indefinitely so will not stop functioning in the event of a shutdown. They might, however, have some problems because of a lack of staff. People applying for more pension benefits, for instance, could see their cases delayed.

How can this get resolved?

With a majority of just five seats in the House of Representatives, Mr. McCarthy needs just about his entire caucus onside to pass anything. One group of Republican hard-liners, led by Florida Congressman Matt Gaetz, is demanding large spending cuts to support any budget bills. Another, which includes Marjorie Taylor Greene, opposes further military aid to Ukraine.

If Mr. McCarthy accedes to any or all of these demands, the resulting legislation will almost certainly die in the Democrat-led Senate or be vetoed by President Joe Biden. In the spring, Mr. McCarthy and Mr. Biden agreed on funding levels for various government departments as part of negotiations over raising the country’s debt ceiling. Mr. Gaetz is demanding far lower funding levels.

“We made a deal,” Mr. Biden said this week. “Now they’re reneging on the deal.”

But if Mr. McCarthy teams up with Democrats and moderate Republicans to pass budget legislation that complies with the debt ceiling agreement, Mr. Gaetz or others would almost certainly try to overthrow him as Speaker.

Adding to the brouhaha is former president Donald Trump – the runaway favourite for the 2024 Republican presidential nomination – who is far more popular than any Republican congressional leader and is discouraging them from making any deals.

“Our Country is being systematically destroyed by the Radical Left Marxists, Fascists and Thugs – THE DEMOCRATS,” he wrote on his Truth Social platform. “UNLESS YOU GET EVERYTHING, SHUT IT DOWN!”

About the only thing the entire Republican caucus can agree on is increasing security at the U.S.-Mexico border amid a surge in migration. So it is possible they will make some deal based on that.

Another, more remote, scenario is for House Democrats and some Republicans to use a discharge petition to force a vote on their own budget legislation, potentially a bipartisan stopgap funding measure already approved by the Senate.

Where will things go from here?

The length of previous shutdowns has varied, from a 34-day marathon during Mr. Trump’s presidency to brief one- or two-day stoppages during the presidencies of Jimmy Carter and Ronald Reagan.

The history has made some Republicans wary: The perception, at least, is that they suffered more in popular opinion than the Democrats did during previous shutdowns. This was probably true of 1996, when then-Republican speaker Newt Gingrich demanded heftier program cuts from then-president Bill Clinton. Mr. Clinton went on to be easily re-elected later that year.

In Mr. Trump’s case, the resolution to the impasse, which turned on funding for his wall on the Mexican border, involved reappropriating military funds without the help of Congress – something he could have done without the drama of a shutdown.

“Government shutdowns are bad news whichever way you look at them. They don’t work as political bargaining chips. They create unnecessary hardships for millions of Americans,” Senate Republican Leader Mitch McConnell said this week.

Whether this view will ever win over the handful of holdouts in the House remains to be seen.