Oct. 1 (Bloomberg) -- The Democrats and Republicans in Congress failed to reach a budget deal before the end of the fiscal year, triggering the first partial U.S. government shutdown in 17 years.
From today, businesses and individuals will see major disruptions in some services, as hundreds of thousands of federal workers get furloughed. Visitors to National Parks will be turned away, government economic reports won’t be released, some federal websites will go offline and Internal Revenue Service call centers will be shuttered.
Essential operations and programs with dedicated funding would continue, including food-safety inspections, mail delivery, air-traffic control and Social Security payments. Here’s a guide:
Q: How soon will I feel an impact?
That depends. If you planned to visit a Smithsonian museum, then right away. However, some federal agencies, including the Energy Department and the Securities and Exchange Commission, say they have funds to continue operating.
Some states and municipalities will need to dip into alternative funding to close the money gap. San Francisco Mayor Edwin Lee said the city’s budget could weather a short shutdown and the temporary loss of federal subsidies. If it continues, though, the disruption could affect 31,000 San Francisco families that rely on federal food and nutrition programs, he said. The U.S. Department of Agriculture said states might have funds to continue the supplemental program designed to help Women, Infants and Children for a week or so.
The Department of Veteran’s Affairs said it can continue paying benefits until the end of October. Veterans may not receive payments for disability compensation, pensions or educational benefits if the budget crisis continues into November, according to the department. Burials at VA cemeteries “may be on a reduced schedule,” the agency said. Department medical facilities will remain open.
Q. I’m a federal employee. Do I come to work today?
A. About 800,000 workers out of 2 million federal civilian workers were affected during a government shutdown in 1995, and a similar number face furloughs this week. Those federal workers are required to show up for work before getting notice that they aren’t required.
Exceptions include jobs not subject to annual appropriations or those deemed necessary to protect life and property, like drug enforcement agents or food inspectors at the U.S. Department of Agriculture. About 85 percent of the Justice Department’s 114,486 employees will be retained during the shutdown, according to its 2013 shutdown contingency plan.
Some agencies will be rendered almost non-functional: The Environmental Protection Agency, for example, will send home more than 90 percent of its workforce home; the Interior Department, which includes the National Park Service, loses 81 percent of its employees.
Q. What’s the impact on the economy?
A. A shutdown lasting three to four weeks would reduce fourth quarter-economic growth by as much as 1.4 percentage points, according to Mark Zandi of Moody’s Analytics Inc. A two-week shutdown could cut growth in the gross domestic product by 0.3 percentage point to a 2.3 percent rate, according to St. Louis-based Macroeconomic Advisers LLC. That would disrupt an economy that grew at a 2.5 percent annualized rate in the third-quarter, after expanding 1.1 percent in the first quarter, according to Commerce Department figures.
Q. I’m supposed to fly on business at the end of the week. Will my flights be able to operate?
A. Air-traffic controllers at the Federal Aviation Administration and Transportation Security Administration screeners will remain on the job. All employees of the U.S. bus-safety regulator, the Federal Motor Carrier Safety Administration, are exempt from furlough. The National Highway Traffic Safety Administration will suspend work on fuel-economy standards and crash test star ratings.
Q. My passport needs to be renewed. Should I cancel that trip to Europe?
A. Passport services are partially funded by fees, so as long as there is money, offices will continue to process applications. Some passport offices located in government buildings that are shut due to the budgetary standoff may not be able to operate.
Q. Will my business still have to file reports to the Securities and Exchange Commission?
A. Yes, 10-Ks, 8-Ks and other corporate filings are still due. The SEC is able to remain open because it has “carryover funding that can be used to support agency operations,” according to an e-mail written by Chairman Mary Jo White that was sent to staff on Sept. 27. Only about 4 percent of the workers at the U.S. Commodity Futures Trading Commission will work under a shutdown. Market oversight and surveillance will continue but only at “a bare minimum level.” The functions of its Division of Enforcement will “largely cease,” according to the CFTC’s 2013 shutdown contingency plan.
Q: What about the Internal Revenue Service?
A: All but 9.3 percent of the tax agency’s 94,516 employees would stay home. That means audits, non-automated collections and processing of paper tax returns would stop. The IRS would close its call centers just two weeks before the Oct. 15 deadline for individual taxpayers filing 2012 returns on extensions.
Q. Will government economic data still be reported?
A. The Commerce Department’s Bureau of Economic Analysis, which publishes statistics including gross domestic product, personal income and international investment, won’t put out its reports during the shutdown, spokesman Thomas Dail said in a phone interview. The agency’s website will also go offline, cutting off access to historical data, he said.
The U.S. Department of Agriculture will suspend crop and livestock reports, the agency said. That will leave commodities traders as well as agribusinesses including Archer-Daniels-Midland Co. without a key tool in judging global supply and demand.
The Energy Information Administration, which tracks and analyzes energy data, said its operations will continue unaffected through at least Oct. 11.
Q. Will federal courts remain open?
A. The federal court system would run for about two weeks without furloughing staff by tapping into fees from filings and other sources, according to a statement by U.S. District Judge John Bates, who is director of the Administrative Office of the U.S. Courts.
Once those funds have been spent, the court system would continue to handle most cases. Federal judges would remain on the job, though it is unclear whether magistrate and bankruptcy judges would be paid until the crisis is resolved.
Q. How will the shutdown affect government contractors?
A: Vendors already working on government projects may continue their activities, though they may see delays in payments until Congress finally passes an appropriations bill, according to Alan Chvotkin, executive vice president of the Arlington, Virginia-based Professional Services Council, which represents contractors such as SAIC Inc. and CACI International Inc. He advises smaller companies to “reacquaint yourself with your banker,” to make sure there is access to credit if government payments slow.
An extended period of inactivity will delay new contract awards, which could harm the small businesses that attracted about $98.2 billion in government awards in 2012.
Q. Will my mother get her Social Security check?
A. Yes. Mail delivery is funded by postage fees, not through tax revenue. Social Security checks, which are paid for by mandatory appropriations, will also continue to go out, though new applicants may see processing delays. Medicare payments, which aren’t subject to annual appropriations, would continue.
Q. What about my trip to Yellowstone?
A. You’re out of luck. According to the Interior Department’s contingency plan: “All areas of the National Park and National Wildlife Refuge Systems would be closed and public access would be restricted.” Volunteers who work at park facilities are also being told to stay home.
Q. What other government services will still operate?
A. The Energy Department won’t process new loan-guarantee applications but it will still monitor the nation’s nuclear arsenal. The Centers for Disease Control won’t do its annual monitoring of flu outbreaks, though staff at the Food and Drug Administration paid for by user fees will continue to oversee the safety of drugs and medical devices.
About 45 percent of workers at the National Oceanic and Atmospheric Administration -- 5,368 out of a total of 12,001 -- will be allowed to work in order to perform tasks including weather forecasting, controlling satellites and managing fisheries, according to the agency’s contingency plan. Websites such as www.weather.gov, which provide alerts, will still be operational during a government shutdown, NOAA spokeswoman Ciaran Clayton said in an e-mail.
Merger reviews will continue with limited staff at the antitrust division of the Justice Department and the Federal Trade Commission, according to postings on the agencies’ websites. Both agencies are mandated to review proposed mergers filed under the Hart-Scott-Rodino Antitrust Act.
Q. Will President Barack Obama and lawmakers in Congress still get paid?
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