Threat of government shutdown looms for US next week: Here's a look at what it means

US House Speaker John Boehner (right) steps away from the lectern after addressing reporters following a House Republican caucus meeting at the US Capitol in Washington on Dec 2, 2014. Mr Boehner urged fellow Republicans on Tuesday to pass a spending
US House Speaker John Boehner (right) steps away from the lectern after addressing reporters following a House Republican caucus meeting at the US Capitol in Washington on Dec 2, 2014. Mr Boehner urged fellow Republicans on Tuesday to pass a spending bill that funds most of the federal government through Sept 30, 2015, avoiding a shutdown fight over President Barack Obama's immigration action. -- PHOTO: REUTERS 

The United States government is heading once again towards a partial shutdown if lawmakers do not strike a deal on government spending before stop-gap spending measures expire on Dec 11.

If a shutdown happens next week, it will be a repeat of last year's episode when House Republicans triggered a 16-day closure after they refused to fund the government unless President Barack Obama agreed to defund or delay his healthcare law, known as Obamacare.

Here's a look at the repercussions of a shutdown:

1. Economy and costs

According to an analysis by financial ratings agency Standard & Poor's, last year's paralysis cost the US economy US$24 billion (S$30 billion), cutting 0.6 per cent off of the yearly fourth quarter GDP growth.

The October shutdown also caused the federal government to bleed billions of dollars, with the payroll cost of furloughed employee salaries alone - that is, the lost productivity of furloughed workers - standing at US$2 billion, said Ms Sylvia Mathews Burwell, who was then director of the White House's Office of Management and Budget.

2. Impact on statistical data

Government economic data may be delayed as a consequence of the federal crisis, forcing private economists to come up with other ways to gauge the US economy's strength.

Figures for unemployment and job creation may be skewed as hundreds of thousands of government workers and contractors vanish from the workforce and then reappear in the following month's survey.

3. Government programmes and services

The last shutdown affected millions of Americans who rely on critical programmes and services halted by the closure, said Ms Burwell in her assessment. Hundreds of patients were prevented from enrolling in clinical trials at the National Institutes of Health and almost US$4 billion in tax refunds were delayed, she added.

Four of five Nobel prize winning scientists who work for the federal government were furloughed during the shutdown as government-sponsored scientific research was put on hold.

4. Government workers furlough

CNN estimated that more than 800,000 government employees were furloughed during last year's shutdown. But most of the 3.3 million US government workers were deemed "essential", which means they would have to keep working.

5. What are the chances of a shutdown?

While Republican leaders have played down talk of a government shutdown as retaliation for Mr Obama's unilateral executive action to grant amnesty to illegal over-stayers two weeks ago, it remains to be seen if they can contain the fringe elements of the party.

Moderate Republicans are backing a clean budget that will allow them to focus their next year on other issues and show that they can govern responsibly once they control both chambers of Congress. Still, it is unlikely the party's hardliners will back such a measure and a compromise solution has already emerged.

Republican lawmakers are talking about splitting the budget into two, funding nearly all of the federal government until next September, except the Department of Homeland Security. That department - which oversees immigration policy - would be funded only until March in a bid to overturn Mr Obama's executive actions.

Sources: Bloomberg, CNN, Agence France-Presse