Published September 30, 2013
The clock is ticking on Capitol Hill for lawmakers to pass a budget to keep the government running.
Much of the hope that lawmakers would be able to come to an agreement has faded as both sides continue to play a game of legislative ping-pong .
If lawmakers and the White House can’t reach a compromise, the government will close at midnight, and federal agencies would suspend many activities and furlough at least 800,000 of its more than two million workers. The government's fiscal year runs from Oct. 1 to Sept. 30, and the Constitution mandates Congress pass bills that fund the government.
The Republican-controlled House of Representatives passed a spending bill early Sunday that included a provision that delays the implementation of the Affordable Care Act for one year. The House also voted to repeal a 2.3% tax on medical devices designed to help pay for the health-care reform. The Senate will take up the spending bill at 2:00 p.m., but isn't expected to pass it with the ACA provision.
Last week, in a 54-44 vote, the Senate passed and sent the House a "clean" Continuing Resolution bill that stripped out the provision to defund the health law.
The country’s history is littered with government shutdowns, with six occurring between 1977 and 1980. The last shutdown lasted 21 days during the Clinton Administration and also centered around a health-care disagreement: Medicare funding.
"It’s not uncommon for an impasse to come up about potential cuts and spending, but what is unusual in this case, is that health reform is already law of the land so trying to defund is where the dysfunction comes in,” says Elaine Kamarck, director, Center for Effective Public Management at the Brookings Institution.
Many government agencies have been busy updating their contingency plans and informing their workers what happens if the government goes dark Monday night. According to the Congressional Research Service (CSR), “government shutdowns have necessitated furloughs of several hundred thousand federal employees, required cessation or reduction of many government programs, and affected numerous sectors of the economy.”
Here’s a look at what to expect if the government shuts down:
Who Still Gets Paid?
The Office of Management and Budget ordered federal agencies to start updating their plans for a potential shutdown earlier in mid-September, and workers in all three government branches are at risk of being furloughed. The Constitution prohibits federal employees and contractors from being paid if appropriations haven’t been passed.
The CSR reports the executive branch is the largest in personnel and budget size, but furloughs cannot be applied to the president, presidential appointees, Congress members and federal employees deemed “excepted.”
For example, workers providing essential services in areas of national security, foreign affairs or public health and safety are exempt from the effects of a shutdown. Air traffic controllers would also stay in place along with border patrol agents.
The 1995 shutdown resulted in 800,000 federal workers initially furloughed. Kamarck, who worked in the White House during that shutdown, recalls a very empty White House.
“Non-essential workers are not allowed to work and you would be in violation of the law if you go to work. During the period of 1995-96 shutdown, there were 30 people in the White House complex as opposed to the couple hundred that are normally present.”
The Department of Education plans to furlough more than 90% of its total staff for the first week of a shutdown, and would phase in more employees if the closure persists.
However, just because workers aren’t going to work doesn’t meant they won’t get paid. Furloughed workers could receive pay retroactively.
“They don’t have to get their pay, there is nothing in the law that requires pay for furloughed government workers, but in every past instance where the government did shutdown, furloughed workers were given retroactive pay, that is a policy choice of members of Congress,” says Hans von Spakovsky, senior legal fellow at The Heritage Foundation.
Federal contractors will stop being paid, and during the last shutdown, more than 20% of federal contracts worth $400 billion were involved, CSR reports.
The court system would continue to operate, with judges, key staff members—including probation officers—not facing a furlough. However, during the last shutdown, work on more than 3,500 bankruptcy cases were reportedly suspended.
Social Security and Medicare payments will still go out, but experts say a shutdown could bring delays.Both programs are considered mandatory funding, which means they were written to be funded indefinitely and there’s no annual appropriation.
During the last shutdown, CSR reports, the Social Security Administration kept fewer than 50,000 workers to help provide existing benefits. “People who are fortunate enough to be turning 66 in the middle of a shutdown, might not be able to sign up for their benefits because there is no one to set them up,” says Kamarck.
The rollout of the health insurance exchanges as part of the Affordable Care Act will still go live Oct.1, even if the government is closed. The money for running the exchanges don't rely on appropriations from Congress.
Non-government workers might not even feel the effect of a closed government.
“The president will do what he can to make it seem like the public is going to be inconvenienced with a shutdown,” says von Spakovsky. “National parks will close and the places people like to visit in Washington, D.C., will be unavailable. But planes will still fly, Medicaid and Social Security checks will still go out…the average person might not even notice a shutdown.”
Veterans could face holdups with receiving services regarding health and welfare and finance. New passport applications could be delayed, and travelers could face longer lines at customs when re-entering the country.
Federal funding for benefits under the Supplemental Nutrition Program for Women, Infants and Children which provides grants to states for food aid, health care referrals and nutrition education for some low-income women and children will stop if the government shuts down.
During the last shutdown, there were delays in processing alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol, Tobacco, and Firearms and recruitment and testing of federal law enforcement officials were cancelled.
Kamarck says shutdowns often show just how many agencies and state and local government rely on federal funding. “When the checks stop coming, people realize how much Washington supports, it’s stunning. During the 1996 shutdown, some Catholic charities had to shutdown without funding, and there are lots of non-profits and for-profits that are dependent on federal grants. When the money stops trickling down from the government, that has a ripple effect throughout communities.
The country’s 368 national parks will shutter, which could hurt tourism revenue since in 1996, an estimated two million visitors were missed during the shutdown.
The National Institution of Health will likely stop enrolling new patients as it did in 1996 into clinical trials and will have to close its hotlines.
Impact on Country’s Debt
Even if Congress comes to a compromise over the budget, another battle remains over the debt ceiling. However, even if a budget agreement isn’t reach, that doesn’t mean the government will default, that only happens if it can’t pay interest or principal on its bond obligations.
If anything, von Spakovsky says a shutdown could help with the country’s debt. “The government won’t be spending money on programs that are not considered emergency or essential and some of these are wasteful government programs, so that’s good news.”
While experts agree a shutdown creates unnecessary political drama, it can also be detrimental to lawmakers’ careers. “Clinton won his re-election probably in the six days of that shutdown,” says Kamarck. “It’s an extraordinarily high-risk gambit for the House of Representatives, Gingrich was finished with speaker after that battle.”