Debt-limit talks have entered a positive phase with President Biden and House Speaker Kevin McCarthy appointing negotiators to prevent a historic national default.
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When Congress hasn’t authorized or extended government funding, there is no authority to spend money. Essential work continues — the military remains on guard — but most federal workers are sent home, and activities cease until Congress acts.The U.S. has experienced four true government shutdowns where operations were impacted by more than one business day, according to the Committee for a Responsible Federal Budget.
A default “would be a very different situation” from a shutdown, said Akabas. “We don’t know what the effects would look like because it’s never happened in the history of our country.” “A default could cause widespread suffering as Americans lose the income that they need to get by,” she said. Disruptions to federal government operations would impact “air traffic control and law enforcement, border security and national defense, and food safety.
“Maybe workers will come into work,” maybe they won’t, Riedl said. “There is an assumption that federal workers would come into work and get paid eventually.”
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