As the U.S. government again faces a partial shutdown, President Joe Biden is calling on Congress to approve $1.6 trillion in funding for federal agencies by Friday.

If lawmakers can't agree on the spending package or a further extension, government departments could shut down as early as this weekend, and would shut down further next Friday. Here is the timeline of a two step possible shutdown and how it might affect markets.

March 1: Transportation, Housing and Food Safety departments would see funding expire.

According to USA Facts, around 44% of the 2023 federal transportation and infrastructure spending budget was for highway transportation, including repairs to roads and civil engineering structures such as bridges.

Meanwhile, 23% was for air travel — particularly infrastructure and jobs such as air traffic control and security screeners. While full-time qualified controllers and security personnel would be required to work, training would cease, leaving both understaffed.

This could have a major impact on air travel, with cancellations inevitable if required maintenance and air traffic control staff are unable to work.

Cancellations would hurt stocks such as $Southwest Airlines (LUV.US)$, which has so far enjoyed a 20% gain in 2024, while $American Airlines (AAL.US)$ has gained 12% and  $United Airlines (UAL.US)$ has climbed 11%. Much of the rest is spent on rail infrastructure and subsidies, which come from the Federal Transit Administration, which could be affected.

Rail freight operators such as the $Union Pacific (UNP.US)$ could be disrupted, which could also mean problems for companies down the supply chain.

The $Ishares Transportation Averageetf (IYT.US)$, an exchange-traded transport that tracks the S&P 500 transportation sub-index, was down 0.3% on Monday at $280.29.

The House Freedom Caucus, meanwhile, is a group of nearly 40 Republicans lobbying for highly conservative policies such as ending funding to drive growth in the use of electric vehicles. Would $Tesla (TSLA.US)$, which is already suffering a sales slump, see further losses in growth for its products?

Some citizens could suffer as grants for public housing aid come under threat, however, the bulk of mortgage and rental-paying home dwellers would be unaffected.

But payments to companies and workers employed on contracts building new public housing could be affected.

March 8: Defense, Legal, National Parks and Science departments would see funding expire.

Military personnel would be required to continue working. Federal justice agencies such as the FBI and CIA would also stay on duty, as would Border Patrol and immigration services. But federal courts would be affected, meaning a backlog in hearings would build up.

Many federal science research institutes, however, would be disrupted, as could government grants for research. Many regulatory bodies would be suspended — apart from those that deal with human safety issues. The Securities and Exchange Commission, for example, would see most of its activities suspended.