Staying the course during a government shutdown | Vanguard (2024)

FAQs

What happens to people if the government shuts down? ›

General Shutdown Information: If the government agencies close for budgetary reasons, all but "essential" personnel are furloughed and are not allowed to work.

Unlike a debt-limit default, a shutdown does not affect the government's ability to pay its debt to bondholders and therefore does not have a direct impact on the government's borrowing costs or creditworthiness.

Pay Status

During a government shut-down, employees who are not required to work under one of the exceptions above may not even volunteer their services. Employees not required to work are “furloughed,” that is, placed in a non-pay, non- duty status, until the shut-down ends.

A: The shutdown may delay the processing or closing of your FHA-insured loan.

If the federal government shuts down, IRS operations will be severely limited. However, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

President Joe Biden on Saturday signed a $460 billion package of spending bills approved by the Senate in time to avoid a shutdown of many key federal agencies. The legislation's success gets lawmakers about halfway home in wrapping up their appropriations work for the 2024 budget year.

All active-duty and Guard and Reservists on active-duty orders are excepted and therefore are required to work without pay.

There are approximately 420,000 federal employees, deemed "essential," including FBI agents, DEA agents, Secret Service agents, and Customs and Border Protection (CBP) agents, who are being required to work without pay during the Trump Shutdown.

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. Energy and Water Development and Related Agencies. Military Construction, Veterans Affairs, and Related Agencies. Transportation, Housing and Urban Development, and Related Agencies.

Some economists think a shutdown could also cause mortgage rates to rise. Rates tend to move in the same direction as yields on 10-year Treasury notes issued by the government.

Why are people not accepting FHA loans? ›

While some sellers may be hesitant to accept an FHA offer, it's important to understand the facts before making a decision. Some reasons a seller might refuse an FHA loan include misconceptions about longer closing times, stricter property requirements, or the belief that FHA borrowers are riskier.

In prior shutdowns, border protection, in-hospital medical care, air traffic control, law enforcement, and power grid maintenance have been among the services classified as essential, while some legislative and judicial staff have also been largely protected.

Government shutdowns can harm economic growth and certainty. A 2013 Macroeconomic Advisors paper found that government shutdowns can impose costs on the economy such as increasing the unemployment rate, lowering the growth in gross domestic product (GDP), and raising the cost of borrowing.

Typically, government shutdowns leave financial institutions, sans those that largely serve government employees , alone.

In a shutdown, the federal government curtails agency activities and services, ceases non-essential operations, furloughs non-essential workers, and retains only essential employees in departments that protect human life or property.