As lawmakers work to prevent a government shutdown just before Christmas, the implications for consumers are becoming more apparent.
If a shutdown occurs, travelers could face significant delays at airports. During the previous shutdown, Transportation Security Administration (TSA) staff experienced increased absenteeism, leading to longer wait times. Although TSA employees are required to work during a shutdown, the lack of pay could result in higher call-out rates. In 2019, absences surged by up to 300% at major airports like Dallas-Fort Worth International Airport. With the TSA projecting a 6.2% increase in screening volumes this holiday season, the combination of more travelers and potential staffing shortages could cause bottlenecks at airport checkpoints. TSA Administrator David Pekoske has warned travelers to expect longer wait times if the shutdown continues.
While air travel may be disrupted, other essential services are expected to continue operating normally. The U.S. Postal Service, which is independent of federal funding, will maintain its delivery services throughout any government shutdown. However, the deadline for certain holiday deliveries has already passed. Priority mail express, crucial for last-minute holiday shipping, has a looming deadline of December 21.
Social Security payments will continue uninterrupted for the nearly 73 million Americans who rely on them. Social Security is classified as a mandatory program and is not affected by short-term funding issues that could arise from a shutdown. However, individuals seeking assistance from the Social Security Administration may experience longer wait times due to furloughs affecting agency staff.
The prospect of a government shutdown is likely to contribute to the volatility already seen in the stock market. Recent weeks have witnessed a decline in equity performance, with the Dow Jones Industrial Average experiencing its longest losing streak since 1974. Investors are closely monitoring developments in Washington, as the potential for a shutdown coincides with signals from the Federal Reserve regarding interest rate adjustments. While government shutdowns historically have minimal lasting effects on equity performance, the current market environment is particularly sensitive. The combination of recent downturns and the Fed's cautious approach to interest rate cuts has created a precarious situation for investors.
As the deadline for a government shutdown approaches, consumers and investors are left to deal with the potential consequences. While some services may remain unaffected, delays in air travel and the impact on market sentiment could have far-reaching effects during the holiday season.