Sept. 26 (Bloomberg) -- Planes will still fly and land safely with the aid of federal air-traffic controllers even if Congress can’t reach a deal to fund the federal government.
FBI agents will investigate crimes, mail will be delivered, Social Security checks and Medicare payments will go out and U.S. military personnel will still report to duty.
That camping trip to Yosemite? Try a staycation instead as national parks will probably close.
The effects of a government shutdown may not be immediately apparent to most Americans should Congress fail to fund operations by Oct. 1. In a protracted shutdown, though, the effects could prove to be far-reaching.
“There will be a noticeable lack of people to do the things that most people take for granted, and will be quite irritating if they don’t happen,” said Scott Lilly, a budget specialist at the Center for American Progress, a Washington-based group that says it promotes progressive political ideas.
Irritations may include unanswered tax-filing questions, said Lilly, a former Democratic aide to the House Appropriations Committee. While Social Security checks will be issued, new claims and address changes might not get processed, he said.
Jobs deemed “excepted” from the shutdown, because they help protect life and property, or are funded by programs not subject to annual appropriations, would go on.
President Barack Obama will issue an order that determines what federal jobs are critical, Lilly said. In the past, air traffic controllers have been retained, while passport offices have been closed. Mail delivery, which is funded by the sale of postage, would continue under a shutdown.
Veterans groups say they worry the backlog of disability claims will grow in a shutdown.
The processing may “come to a screeching halt,” Ray Kelley, legislative director for the Kansas City, Missouri-based Veterans of Foreign Wars, said by telephone.
About 800,000 of the almost 2 million federal workers at agencies funded under annual appropriations could be furloughed, said J. David Cox, national president of the American Federation of Government Employees, which represents about 650,000 people. The 2 million workers don’t include active military personnel or Postal Service employees.
The budget impasse marks the sixth fiscal showdown between Democrats and Republicans since 2011. The Republican-led House passed and sent to the Senate legislation Sept. 20 to fund the government that includes language blocking implementation of the 2010 health law. Senate Majority Leader Harry Reid, a Nevada Democrat, said the chamber won’t pass a bill defunding Obama’s signature legislative achievement.
One risk from the impasse is the further diminution in the eyes of the public about the efficacy of Washington politicians, said G. William Hoagland, a senior vice president at the Bipartisan Policy Center in Washington.
“It plays into the hands of those that say the government can’t do anything right,” Hoagland said by telephone.
Government agencies are dusting off contingency plans assembled in late 2011 in the event a compromise isn’t reached.
Those plans show that some agencies would be affected more than others because of exemptions written into the law. The Justice Department, for example, estimated in 2011 that more than 94,000 of its 117,579 employees would be retained because a “significant portion” of its mission involves protection of “human life and property.”
Even so, Attorney General Eric Holder said at a news briefing today that a shutdown would be, “something very bad,” and would affect operations at the Federal Bureau of Investigation, Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration.
“I would hope that what I think I would characterize as the dysfunction that I see up on the hill might in some way, somehow be resolved,” Holder said.
Officials at other agencies referred questions about a possible shutdown this year to the Office of Management and Budget in the White House.
“Agencies are in the process of updating their plans” for a possible shutdown, Steve Posner, OMB communications director, said by e-mail. He said he had no further information.
Most of the Internal Revenue Service would shut down if government funding expires, a prospect that has acting commissioner Danny Werfel “extremely concerned,” he told a House Ways and Means subcommittee Sept. 18.
“We can’t process taxes, we can’t enforce, we can’t collect debts,” said Werfel, who was controller of OMB before taking the temporary IRS job earlier this year. “There’s so many things we can’t do that have a direct impact on our bottom-line deficits, so there’s irony there.”
At the Pentagon, a government shutdown could trigger furloughs for about half of the Defense Department’s 800,000 civilian employees, according to Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, a Washington-based research institute that focuses on national security.
Active-duty military personnel will report but their “pay may not go out,” Harrison said.
Deputy Defense Secretary Ashton Carter in a Sept. 23 memo to department employees said “a large number of our civilian employees would be temporarily furloughed” under a shutdown.
Already, most civilian defense employees were required to go without pay for six days this year because of automatic across-the-board budget cuts known as sequestration.
The loss of income from additional furloughs will trickle through local economies, Carter said, as workers will have less to spend.
According to the Transportation Department’s 2011 plan, 40,141 of its 58,011 employees would keep working because their jobs are considered essential for safety or are funded through trust funds that don’t depend on the congressional appropriations process.
At the Federal Aviation Administration, 33,550 of 48,463 personnel would stay on the job, including air-traffic controllers, airplane field inspectors and workers who maintain airport navigational aids, according to the 2011 plan.
The National Highway Traffic Safety Administration, which oversees the auto industry, would retain 207 of its 591 workers, according to the 2011 plan. Safety research on occupant protection, drunk driving and motorcycle crashes, all financed by the Highway Trust Fund, would continue.
A lengthy fight could leave companies that rely on the government for revenue in the lurch.
Leigh Armistead, president of Peregrine Technical Solutions LLC, a small defense contractor specializing in cybersecurity, said that a slowdown in funding resulting from a shutdown could hurt his Yorktown, Virginia-based company, which employs about 20 people, including part-time workers and consultants.
“I still have to pay salaries,” said Armistead, a retired Navy lieutenant commander. “If there’s a delay in payments, then all of a sudden I have to go to the bank and take out a loan to pay salaries.”
Complaints from irate business owners helped push Democrats and Republicans to reach a deal during the last shutdown that lasted from December 1995 to January 1996, according to Hoagland of the Bipartisan Policy Center.
“There was building pressure from the business community to resolve this,” Hoagland said.
In those shutdowns, federal workers in roles relating to public safety, medicine, border patrol, emergency response, and air traffic control continued to work, according to a Congressional Research Service report released in August.
The National Institutes of Health didn’t accept new patients into clinical research trials or answer hotline calls concerning diseases; applications to the Bureau of Alcohol, Tobacco, Firearms and Explosives were delayed; 368 National Park Service sites closed; and about 200,000 passport applications went unprocessed, according to the CRS.
Of $18 billion in Washington-area contracts, $3.7 billion, or more than 20 percent, reportedly were affected adversely by the funding lapse during the 1996 government shutdown, CRS said.
Todd McCracken, president of the Washington-based National Small Business Association, said that a government shutdown could put small business contractors “behind the ball, even when the money starts flowing again.”
“People can’t stick around without getting paid,” McCracken said in an interview. “There are bound to be some contractors that lose employees, especially if it goes on for more than a few days.”
Some business leaders say they’re increasingly frustrated with the uncertainty over the budget, and are urging Congress to strike a deal that avoids a shutdown and reach a separate agreement to extend the debt ceiling, another looming deadline.
“It feels like Groundhog Day all over again,” said Eric DeMarco, chief executive officer of San Diego-based Kratos Defense & Security Solutions Inc., which makes security and surveillance systems. “You couldn’t run a company like this. You can only run a government like this.”
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