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While federal workers are back to work this week, the threat of another possible shutdown looms. On January 16, 2019, President Trump passed legislation that calls for furloughed workers to recieve back pay once the government reopens. Still, it is likely to take up to a week for furloughed workers to receive back pay (and maybe longer, depending on the agency).
Despite the shutdown’s end, the economic impact will likely be felt for months to come. The non-partisan Congressional Budget Office (CBO) released a report on January 28, 2019, entitled “The Effects of the Partial Shutdown Ending in January 2019” which outlines the expected economic impact of the shutdown. CBO estimates that the five-week shutdown has cost the U.S. economy $3 billion that it will never recover. The CBO has also lowered its projection for Q1 2019 GDP growth by 0.02%.
After the government reopened, both Democrats and Republicans have expressed optimism about reaching a funding deal before the February 15th deadline. If Congressional leaders cannot reach a deal, it is possible that President Trump will try to take executive action to secure funding for a border wall. Any such action would undoubtedly lead to multiple lawsuits from Democrats challenging the President’s authority to redirect funding to build a wall. If a deal is not reached by February 15, 2019, the U.S. government will once again experience a partial shutdown. Worldwide ERC® will be sure to keep you up to date as negotiations progress.
As the shutdown dragged on, the operations of important federal agencies such as the IRS, Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA) ground to a halt. The shutdown created chaos last week at major American airports as hundreds of air traffic controllers missed work. Government shutdowns are costly and impede business. We have yet to measure the full effect of this shutdown’s impact, but in short, having the full U.S. government open again is good news for the mobility industry.
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