It's entirely possible that a federal government shutdown is looming in less than 48 hours. But why? And how can it be avoided?
The federal government's new fiscal year begins in two days on October 1. Congress must pass a bill to fund the government ahead of the start of the new fiscal year for it to keep running – by the time Thursday becomes Friday at midnight to be exact.
If that bill isn't passed and the government isn't funded, then it could at least temporarily shut down.
That's an outcome Democrats in Congress are working to avoid alongside raising the debt ceiling, something that U.S. Treasury secretary Janet Yellen says must occur by October 18 lest the nation default on its debt payments.
"It is imperative that Congress swiftly addresses the debt limit," Yellen said while testifying before the U.S. Senate Banking Committee.
"If it does not, America would default for the first time in history. The full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession."
If the U.S. defaults, it would not have the money to operate the government, which is why the two issues are linked. It could also throw the nation into a financial crisis, crash the stock market and have a negative impact on the country's fiscal reputation in regards to its creditors.
A government shutdown would also impact the ability to issue Social Security checks to retirees and paychecks to federal workers.
The government has shut down before, most recently during the Trump administration from December 28, 2018 to January 25, 2019, the longest U.S. government shutdown ever at 35 days. It also shuttered its doors temporarily twice during the Clinton administration and once under Obama's watch.
The U.S. however has never defaulted on its debt.
Congress could pass a short-term bill to fund the government past October 1, giving them another 17 days to work on raising the debt ceiling.
