If the government shuts down just before Christmas, some parts of daily life might be disrupted, like holiday travel, while others, like mail deliveries, will continue as usual.
Lawmakers are working against the clock to reach an agreement before the government runs out of funding at 12:01 a.m. Saturday. The last shutdown, in 2019, cost the U.S. economy around $3 billion, according to the Congressional Budget Office.
If another shutdown happens now, just days before Christmas, it’s unclear how long it would last. However, here’s a breakdown of what you can expect if it happens.
Travel Delays at Airports
For those planning to fly during the holiday season, travel might get more stressful. During the last shutdown in 2019, many Transportation Security Administration (TSA) workers didn’t show up for work because they weren’t being paid.
TSA employees are considered essential workers, meaning they’re required to work even during a shutdown, but they don’t receive their paychecks until the government reopens.
Without pay, some TSA workers might stay home, leading to staffing shortages. This could cause longer wait times at airport security checkpoints, especially during the busy holiday season.
TSA has already warned that a prolonged shutdown could result in longer lines.
In 2019, the rate of TSA officers calling out sick rose dramatically, with some airports like Dallas-Fort Worth seeing absentee rates increase by 300%.
The national absence rate for airport screeners went from 3% to 10% during that time, causing significant bottlenecks.
Mail and Social Security Payments Will Continue
Thankfully, mail services are expected to operate normally, even if the government shuts down. The U.S. Postal Service is an independent agency funded by its own revenue, not by taxpayer money, so it won’t be affected by the shutdown.
Holiday deliveries, however, depend on when you mail your packages. Most deadlines for delivery by Christmas have already passed for standard shipping options like ground service and first-class mail.
The deadline for priority mail express is approaching, with December 21 being the last chance to send packages for guaranteed Christmas delivery.
Social Security payments will also continue without interruption. The nearly 73 million Americans who rely on these benefits can rest easy knowing their checks will arrive as scheduled.
Social Security is a mandatory program, meaning it doesn’t depend on the short-term funding that’s currently at risk.
However, anyone needing help from the Social Security Administration might experience delays. Many agency employees could be furloughed, and the administration is already dealing with staffing shortages. With staffing at a 50-year low, longer wait times for customer service are likely.
Stock Market Reactions
The stock market has already been volatile, and a shutdown could add to the uncertainty. Historically, government shutdowns don’t have long-term effects on stock performance, but they often cause a temporary dip due to investor concerns.
On Friday morning, stocks showed signs of recovery despite the looming threat of a shutdown. The Dow Jones Industrial Average, which had been on a 10-day losing streak, was up nearly 1% after encouraging inflation data was released.
Experts say markets tend to bounce back quickly after shutdowns, but the timing of this one could create more anxiety.
Recent signals from the Federal Reserve indicate that interest rates might be cut at a slower pace than previously expected.
This announcement already unsettled investors, sending the Dow to its worst trading day since August earlier this week.
Mark Hackett, chief of investment research at Nationwide, explained that while shutdowns usually cause a brief emotional reaction in the stock market, the combination of shutdown risks and the Fed’s decisions is amplifying concerns.
According to Hackett, it’s like adding “two cans of gasoline” to an already volatile situation.
What to Expect Moving Forward?
While a government shutdown before Christmas is inconvenient, some services are built to withstand such interruptions.
Mail deliveries and Social Security payments won’t stop, ensuring that some essential functions continue. However, travelers and anyone needing government assistance could face significant challenges.
Holiday travelers, in particular, should brace for possible delays at airports. TSA staffing issues could make security lines longer, leading to missed flights or added stress during an already hectic season.
Those relying on government services, such as help from the Social Security Administration, might experience slower responses due to furloughed workers.
In the stock market, the immediate effects of a shutdown are usually minor, but the current economic environment could make this one more impactful.
Investors and retirement account holders should prepare for some turbulence as the market reacts to ongoing uncertainty.
For now, the focus is on Congress. Lawmakers are working to pass a deal that prevents the shutdown before the deadline. Whether they succeed or not will determine how the holiday season unfolds for millions of Americans.
If the shutdown does occur, its effects will likely vary depending on how long it lasts. A short shutdown might cause minimal disruption, while a prolonged one could lead to more significant impacts on travel, government services, and the economy.
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