- Partial US Government Shutdown Hurts Businesses Dependent on FDA, SEC and IRS
While the US-China trade war has meaningfully slowed China’s economic growth, the United States has seen a close to 19 percent drop in year-over-year investment in the country in 2018, according to the United Nations Conference on Trade and Development (UNCTAD).
Adding fuel to the proverbial fire, Congress reached an impasse on a bill to fund the government past December 22, 2018. 33 days later, Democrats continue to vow that they will not approve any bill providing funding to Trump’s proposed southern border wall with Mexico.
Trump, for his part, has vowed that he will not sign any bill into law that does not contain a provision of $5.7 Billion to partially construct a barrier on the border with Mexico. This has led to a enduring 33-day shutdown of parts of the Federal U.S. government, including the Food & Drug Administration (“FDA”), the Internal Revenue Service (“IRS”) and the Securities & Exchange Commission (“SEC”) along with hundreds of other so-called non-essential governing bodies.
The cost of the shutdown is staggering – $12-22 Million per hour, according to Democratic Congressman John Delaney.
Politifact reported a few days ago that the shutdown would shave $23 BILLION off the U.S. economy this year.
Whatever the cost, it’s beginning to bite professionals, entrepreneurs and businesspeople from the left, right and center. 800,000 Federal employees are working without pay. The IRS is not issuing employer identification numbers (EINs),, likely threatening thousands of new businesses daily; hundreds of thousands of new jobs.
“If I can’t get an EIN, I can’t do business,” a Los Angeles-based businessman told Mktbull.com. “Ultimately that hurts service providers, jobseekers and the economy at large.”
Capital formation is at a stand-still with the SEC operating with a skeleton staff – it’s own website warning that staff will be on standby for ’emergency situations’ only.
“Due to the ongoing federal government shutdown, the SEC is currently operating in accordance with the agency’s plan for operating during a shutdown. Effective Thursday, Dec. 27 and until further notice, the agency will have a very limited number of staff members available. The SEC has staff available to respond to emergency situations involving market integrity and investor protection, including law enforcement.”
The FDA is most likely not processing any reviews of new and critical drugs – called New Drug Applications (“NDAs”) – being developed to treat or cure life-threatening diseases.
It is time the US government put its citizens’ interests first to fund essential government agencies, including the FDA, SEC, and IRS.
Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favorite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.