Shutdown threatens a 'gut punch' as agencies brace for closure

- Januari 19, 2018

Federal agencies are bracing for a shutdown amid growing uncertainty about whether the Senate will vote to keep the government open past midnight.

Unlike the last federal shutdown in 2013, which President Barack Obama had signaled for weeks, this threat arrived abruptly.

On Thursday morning, Trump fired off a hot-tempered tweet to Congress condemning a short-term deal to fund children’s health insurance. By afternoon, federal agencies were issuing legal guidance, briefing staff on the definition of “essential” personnel, and dusting off their contingency plans. On Thursday night, the Office of Management and Budget began releasing legal guidance to agencies.

On Friday morning, OMB chief Mick Mulvaney said preparations were moving ahead as though a shutdown might happen.“We had our meeting just about a half an hour ago, a teleconference with a bunch of agencies to tell them to start to implement their lapse plan, the next step in preparing for a lapse in funding, that’s what we call a shutdown, the formal name of it,” Mulvaney said. “I guess the bottom line is we’re working to make sure there is no shutdown but if the Senate or the House can’t get together to finalize a deal we’ll be ready.”

The city has been brought to the brink before, but rarely – and maybe never – with so little warning.

The 16-day closure of 2013, one of the government’s longest, arrived after a slow windup from the Obama administration. Obama spent weeks using the threat of a shutdown to score political points with the public, squarely blaming Republicans and warning federal employees what was coming. When the shutdown did come, Obama’s political calculus paid off; Republicans took most of the heat.

In 2013, more than 850,000 federal employees--nearly 40 percent of the full-time federal workforce--were left without work and pay. Unemployment claims surged, consumer confidence tanked, and the work stoppage shaved 0.3 percentage points from economic growth, according to the Congressional Research Service.

While Congress has made federal workers whole after past furloughs, retroactive pay isn’t guaranteed. The average full-time federal employee earns $82,700, according to the Office of Personnel Management, but hundreds of thousands earn far less.

“Half a million federal employees make less than $50,000 a year, they’re living paycheck to paycheck,” said Joyce Warner, executive director of the Federal Employee Education and Assistance Fund. “This can reverberate and cause people long-term financial anxiety. It doesn’t take much to throw people under the bus financially.”

The fund, a non-profit that provides interest-free loans to needy government employees, stopped offering furlough aid after the 2013 shutdown, when it was overwhelmed with requests.

Only 15 percent of the federal full-time permanent workforce is based in the Washington area, meaning the effects of a shutdown will reverberate across the country. Six million small businesses might temporarily lose access to financial aid and applications for new Social Security benefits could be delayed.

And a prolonged shutdown could wind up costing taxpayers money. In 2013, agencies had to pay higher costs to contractors for more than 10,000 stop-work orders and the National Park Service lost $7 million in user fees and other revenue.

Interior Secretary Ryan Zinke tweeted that his department would aim to keep public lands “as accessible as safely possible under the law” during a shutdown. Spokeswoman Heather Swift said areas that can stay open with limited support should, while lands that need snow removal or regular maintenance would close.

The timing couldn’t be worse for the Internal Revenue Service, which has just begun work to implement the new tax law and preparing for the start of tax filing season. Beset by steady drops in staff and funding over the better part of a decade, the IRS already deals with operational challenges on a daily basis.

The agency’s shutdown plan assumes it isn’t handling tax returns and deems only 13 percent of employees essential enough to stay on the job. Phone calls from taxpayers and tax professionals would go unanswered.

A shutdown would deliver "a gut punch" to the already strained agency, National Treasury Employees Union President Tony Reardon said in a written statement. “Those most harmed in this scenario would be the American taxpayer, businesses, and the tax preparer community.”

At the Pentagon, troops will report to duty as usual but won’t get paid – including those serving in combat zones. Congress could step in to keep some salaries flowing, which it did in 2013. But death benefits won’t be paid to families whose loved ones lose their lives, Pentagon budget chief David Norquist said, something that prompted a dramatic backlash in 2013.

Major events, including U.S. trade talks scheduled to begin Sunday in Montreal, Canada, are in limbo. In 2013, then-U.S. Trade Representative Michael Froman canceled the second round of talks with the European Union on the proposed Transatlantic Trade and Investment Partnership, and Obama scrubbed plans to attend the annual Asia-Pacific Economic Cooperation meeting in the Philippines.

Businesses will have their own headaches. Government vendors could lose revenue and the regulatory process will grind to a halt. An expected lawsuit over the Federal Communication Commission’s repeal of net neutrality rules can’t begin until the new rule is actually published in the Federal Register.

The Food and Drug Administration, which oversees the safety of about 80 percent of the food supply, would keep about half of its workforce on the job but routine inspections of food plants would likely be put on pause. When the government closed in 2013, food safety advocates raised concerns about staffing at FDA and the Centers for Disease Control and Prevention, which is charged with tracking foodborne illness outbreaks.

Some agencies have unspent funds that will help them weather the pain. The Nuclear Regulatory Commission has enough money to keep running for about seven business days, according to an email sent to staff by the agency’s executive director for operations. The Federal Energy Regulatory Commission weathered the two-week shutdown in 2013, when then-FERC Chairman Jon Wellinghoff suggested the agency could go a full month before being reduced to essential personnel.

At the Environmental Protection Agency, nearly 95 percent of workers will be furloughed, including Administrator Scott Pruitt, who is expected to visit Japan and Israel next week.

Work will stop work at Superfund sites unless there’s an imminent threat to health or public safety.

Localities expecting project funding will see delays, which could be significant if a shutdown stretches into weeks. In 2013, some states canceled projects because of the funding uncertainty. And some 1,200 school districts relying on $1.3 billion annually in federal aid already are dealing with financial uncertainty because the government has been funded through stopgap measures since last year.

Problems are unlikely if a shutdown lasts a couple days or a week, but could be detrimental if it drags out. In 2013, some school districts had to borrow from local banks to keep operating. Tens of thousands of Head Start spots were jeopardized, military academies were forced to stand down, federal technical assistance ground to a halt and shuttered Smithsonian museums endangered field trips.

A shutdown, if it comes, will be less disruptive at airports, where air traffic controllers and baggage screeners are considered essential employees. They’ll remain on the job, although without pay.

With reporting by Nancy Cook, Aaron Lorenzo, Jacqueline Klimas, Kathryn Wolf, Eric Geller, Helena Bottemiller Evich, Darius Dixon, Anthony Adragna, Megan Cassella, Caitlin Emma, Victoria Guida, and Matt Daily.


 

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