Stopgap Funding Bill

In News

• The US President has signed a bill that will fund the government avoiding the risk of a shutdown with reference to coronavirus vaccine mandates. 

About

• Current issue: The issue revolves around Biden’s vaccine rules.
  • The debate is over coronavirus vaccine mandates at a time when there are concerns about the potential spread of the Omicron coronavirus variant in the country.
  • The Biden administration sees vaccinations as the quickest way to end a pandemic that has killed more than 780,000 people in the US.
• Both chambers of Congress passed the legislation: to avoid a short-term shutdown of the government.

 What is a Stopgap Funding Bill?

• It means that the government does not run out of its existing funds meant to run federal programs.
• When Congress fails to fund the government, a government shutdown is declared and all non-essential services are stopped.

How does federal funding expire?

• The appropriation acts provide the budget authority: to obligate and expend funds from the US Treasury for specific purposes.
  • In other words, appropriation acts give different federal agencies a legal basis to withdraw money from the US Treasury.
  • These appropriation acts are signed into law by the President.
• These funds have a specific deadline: 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.

What does a government shutdown mean?

• Meaning: A government shutdown happens when Congress fails to fund the government, in which case the Government stops all non-essential services, while essential services such as the armed forces and police departments etc. continue to function.
  • Services such as border protection, medical care, air traffic control, law enforcement and maintenance of power grids are classified as essential activities.
• Halt in operations: During a government shutdown, many federally run operations will halt. Some organizations may still stay open by running on cash reserves, but once these funds run out, they will also close.
• Scope of shutdown: While shutdowns can also occur within the state, territorial, and local levels of government, the term “government shutdown” is usually used to refer to the federal government.
• Disagreement: 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.

Impact of government shutdown on public

• On various sectors of the economy: 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.
• Other government programs: such as social security and Medicare, health and human services and national parks may be affected.
• Effect on the private sector: As the government operations slow or stop altogether, the effects may also spread to businesses in the private sector.
• Loss of Business: Businesses such as hotels, restaurants, and other hospitality services that cater to the visitors of U.S. national parks and monuments, will lose business during a shutdown.
• Effect on Banks: Banks, while not government-controlled, are not able to access the information they need to process loan applications during government shutdowns.

Source: IE