Stopgap Funding Bill

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    • 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