US State Department Preps For Possible Government Shutdown

The U.S. State Department has been actively planning for a possible government shutdown, said spokesperson Matthew Miller on Thursday.

According to Reuters, the State Department has been engaging in contingency planning for several days.

The focus of these plans is to identify the roles that are crucial to national security and that can continue during a shutdown, and those that can be suspended.

Miller stated that they are maintaining hope that Congress will fulfill its duty by funding the government, but they are also preparing contingency plans in case Congress does not.

A group of staunch conservative members, led by House Republicans, have refused to accept the spending levels for fiscal year 2024, which were previously agreed upon in a deal between Speaker Kevin McCarthy and President Joe Biden. Republicans, who currently hold a House majority of 221-212, are pushing for an additional $120 billion in cuts and more stringent immigration-related legislation along the U.S.-Mexico border, Reuters reports.

See Also: Howard Stern Claps Back At Trump’s Social Media Rebuke: ‘Call Me Woke As You F***ing Want’

In the event of a government shutdown, U.S. embassies and consulates would remain operational, and passport and visa processing would continue as long as there are sufficient fees to cover these activities.

However, nonessential official travel and other events would be scaled back, following a shutdown plan released in August. Additionally, some foreign aid programs may face funding shortages.

Among the sectors facing substantial impact, the defense and aviation industry stands out, as evidenced by the iShares U.S. Aerospace & Defense ETF ITA experiencing a nearly 9% decline this month.

A recent report from Moody’s Investors Service sounded a warning about the potential adverse effects of a U.S. government shutdown on specific defense service contractors. Delays in disbursing funds to entities like the Department of Defense or NASA may lead to reduced accounts receivable turnover, possibly impacting liquidity.

Read Next: All Eyes On PCE: What to Expect From Fed’s Key Inflation Metric This Friday

Photo: Shutterstock