The government is in a state of partial shutdown, and it’s a possibility that it could last into the new year if lawmakers and the White House are unable to reach an agreement on funding. Federal departments including Housing and Urban Development, Interior, Agriculture, Commerce, State, Transportation, Justice, Treasury, and Homeland Security are affected.

Essential staff remain posted during the shutdown to keep services running. Aviation security, as an example, is something that continues to run regardless of a deadlock in Washington.

However, hundreds of thousands of federal workers will be placed on forced leave until funding is passed in Congress, and there are broader impacts on specific functions.

Here are three ways that a shutdown causes disruption.

A Shutdown is a Major Administrative Hurdle

The logistics of carrying out a shut are not trivial. Federal departments must go through the process of advising staff, determining exactly which services are ‘essential’, and employees need to be provided paperwork to sign in the case that they will be furloughed.

This puts a strain on employees, their supervisors, and the management teams above them. It can take focus away from projects and will set some departments on the back foot when they come back to work once funding is approved.

Financial Services Are Put on Hold

The USDA’s Farm Service Agency will be impacted by the shutdown, making it impossible for farmers and other agriculture sector businesses to obtain government-backed credit for as long as a it lasts. Due to the timing of this shutdown, the impact should be minimal, but this will change if the government still can’t pass a spending bill in the initial stages of 2019.

The Federal Housing Administration will also be running at minimal capacity for as long as the shutdown lasts. This will delay processing of FHA loans. Again, the timing helps in this case, with reduced activity during the holiday period. However, an extended shutdown could create a backlog of administrative work.

IRS Filings Could be Delayed

Tax filing season can begin as early as January, but that will be unlikely if the shutdown continues into the first week of next year. This could lead the IRS to delay the opening of the season until February. There would then be a significant ‘rush’ period that causes internal delays. The workload on IRS employees would also increase.

A shutdown isn’t good for the nation, and anybody interested in either financial markets or high-level politics should watch this situation closely. The Senate will reconvene on Thursday, which is the earliest that a solution is likely to be found.