Wednesday, April 6, 2011

How a government shutdown might affect you

The government may shut down Friday night. (Diliff/Wikimedia Commons)

As the debate over control of the federal budget speeds the government toward a shutdown, many Georgians are likely wondering what effect a shutdown would have on local services provided by the federal government.  The federal government pervades American life at all levels from mail delivery by the postal service to government checks for Social Security recipients and, most obviously and importantly, protection by the U.S. military and federal law enforcement agencies. 

A government shutdown is not a disaster and is not unprecedented.  In fact, there have been five government shutdowns since 1981.  The most famous was the last series of shutdowns in 1995 and 1996 when President Bill Clinton sparred with Speaker of the House and Georgia native Newt Gingrich.  The Republicans actually won a balanced-budget agreement in the confrontation, but suffered politically.  The balanced budget of the late 1990s is remembered as Clinton’s achievement and helped him to win re-election.

The debate is similar to that of the 1990s.  The current problem stems from the fact that Democrats did not pass a federal budget for 2011 while they held large majorities in both houses of Congress prior to the last elections.  According to federal law, a budget should have been passed by October 1 of last year.  Instead, Congress has passed a series of temporary spending measures.

According to the Wall St. Journal, the Obama Administration will have borrowed approximately $3.7 trillion in its first three years, “more than the entire accumulated national debt for the first 225 years of U.S. history.”  The Democratic budget proposal cuts a meager $6.5 billion from the federal budget for 2011.  The Republicans, responding to voter anger over increasing deficits and spending, want $61 billion in cuts for 2011 and are ultimately eyeing $6.2 trillion in cuts over ten years as a part of Paul Ryan’s “Path to Prosperity.”

If the two parties cannot reach agreement and pass a budget, parts of the federal government will cease operations until an agreement is reached.  Essential services of the government, as well as parts of the government that are funded by other means, such as user fees, would remain in operation.  Some of the areas that are deemed essential services are military operations, border security and air traffic control.  Federal courts and the justice system would also remain open.  These areas of government were unaffected by previous shutdowns.

Mail deliveries by the Post Office would likely continue.  The Post Office gets some federal funds, but much of its operation is funded by the sale of stamps and delivery fees on packages.  The Federal Reserve would also remain open.

Recipients of entitlement checks such as Social Security and Welfare can also rest easy.  The government would continue to send out checks to existing recipients, but applications for new benefits would not be processed.  Medicare would also continue to be funded.

The main affect of the shutdown would likely be on administrative workers.  In addition to entitlement applications, other applications, such as those for firearms and explosive permits from the BATF or visas and passports from the State Department, would not be processed.  In the past, health care for veterans and clinical trials at the National Institutes of Health have also been delayed, along with work on bankruptcy and delinquent child-support cases.  Tracking of diseases by the CDC, headquartered in Atlanta, might also be interrupted.  Processing of farm credit, small business loans and government-backed mortgages would also cease.  Toxic waste cleanup at EPA Superfund sites was also stopped in previous shutdowns.  It is also possible that some tax refunds would be delayed, but audits would also be suspended.

Georgia’s many national parks and historic sites might well be affected since admission is free.  Georgia has eleven national parks that would almost certainly be closed in a government shutdown.  National museums such as the Smithsonian Institute in Washington, D.C. would also close.  Of course, Georgia’s state parks and historic sites would remain unaffected.

Perhaps most disturbing is the possibility that soldiers and military retirees would not be paid during a government shutdown.  Military personnel would continue to accrue pay, but may not receive pay checks until a new budget is passed.

Ironically, a government shutdown will probably not save the government money.  Government shutdowns actually cost more than normal operations because the government loses revenue when it is not in operation.  Current estimates are that a shutdown might cost taxpayers more than $100 million per day.  Depending on the length of the shutdown and the success of the Republicans at getting their desired cuts, taxpayers might end up saving money with a short shutdown rather than having billions more dollars in deficit spending enacted into law under the Democratic plan.

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