President Trump's decision to force a government shutdown over the refusal of congressional Democrats to approve $5 billion for a wall on the Mexican border means that more than 800,000 federal workers will be facing furloughs or forced to work without pay if a resolution isn't reached before funding expires at midnight Friday.
Nine of 15 Cabinet-level departments and dozens of agencies, including the departments of Homeland Security, Transportation, Interior, Treasury, Agriculture, State and Justice, as well as national parks and forests, will lose funding.
The Defense Department as well as the departments of Veterans Affairs and Health and Human Services already have been funded and will continue to operate as usual. The U.S. Postal Service won't be affected because it's an independent agency.
For investors, a shutdown could increase market volatility by reducing activity in the fourth quarter, following the fourth Federal Reserve rate hike of the year earlier this week, according to economists at S&P Global.
"A selective shutdown would have a modest, if not muted, impact on the $19 trillion economy in real terms," according to S&P Global. Shutting down 25% of the government "could shave approximately $1.2 billion off real GDP in the quarter for each week part of the government is closed."
Regions that have a preponderance of federal workers could suffer more, the S&P economists said.
"There also could be losses for business more reliant on holiday cheer for a boost -- such as retailers, restaurants, and entertainment establishments near government sites -- because some customers may choose to close their pocketbooks, seeing only a lump of coal inside," according to the S&P note.
Trump tweeted Friday that a shutdown "will last for a very long time," seeking to blame Democrats for a lapse in funding that just last week he said he would be proud to initiate.
"I will take the mantle. I will be the one to shut it down," Trump told Sen. Chuck Schumer, Democrat of New York, and Rep. Nancy Pelosi, the leader of the Democrats in the House, in a televised argument last week.
The S&P economists at the time of publication expected that a shutdown would be avoided, but with caveats.
"Betting the holiday budget decision on a rational U.S. government might be a risky proposition heading into the new year," they wrote.
Congress had been on track to fund the government but those plans were disrupted after Trump, criticized by some of his supporters for seeming to back down on wall funding and fearful of what that might do to his re-election prospects, changed his mind again.
Prospects that the Senate would approve wall funding are remote, given strong opposition from Democrats and the fact that 60 votes are needed to approve the bill. Republicans have a small majority currently. The president urged senators to change their rules to let the measure pass with a simple majority, a tactic that Republican senators including Orrin Hatch of Utah and Lamar Alexander of Tennessee said they oppose.
One possibility Friday is that the Senate strips the border wall out of the bill but keeps the disaster funds and sends it back to the House. House lawmakers said they were being told to stay in town for more possible votes. Senators were supposed to reconvene at noon on Friday but that hasn't happened yet.
A partial shutdown, if it happens, will likely last no longer than the first week of January, when Democrats take control of the House of Representatives. At that point, the expectation is that the leadership will pass a continuing resolution to get the government going again. In the meantime, the president has said that he will not go to his Florida country club for Christmas vacation if the government is partially shut down.