Why You Shouldn't Fear a Government Shutdown

By Dan Caplinger Politics Fool.com

The federal government is once again on the brink of a shutdown, and lawmakers haven't yet come to agreement on funding for government operations beyond Friday. Without Congressional authorization, the government could close its doors for the first time since late 2013. Yet even though the concept of a government shutdown might sound almost apocalyptic, the reality of past shutdowns has been far less dramatic. Although certain services would be affected if lawmakers don't act, many of the things Americans count on their government doing will continue unchecked.

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Government agencies have plans in place for shutdowns

Since 2013, government agencies have been prepared for the potential of a government shutdown. The White House Office of Management and Budget have put together a long list of agency contingency plans. Some of the most important plans include the following:

 

  • Social Security's plan calls for the agency to keep accepting benefits applications, handling appeals, and handling certain routine functions. Recipients will still receive their Social Security benefits. However, new or replacement Social Security cards, replacement Medicare cards, and benefit verification information won't be available.
  • Mail service will continue, but the Postal Service's Inspector General will furlough more than half of its staff.
  • The U.S. Treasury will continue to manage the government's borrowing and spending, avoiding any risk of default. But many Internal Revenue Service functions would be interrupted.
  • The Transportation Security Administration will keep on about 51,000 out of 59,000 employees, not including law enforcement officers and various other security-sensitive personnel. Other key personnel in the military and in agencies under the Department of Homeland Security would keep the bulk of their workers from being furloughed.

 

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What all that boils down to is that for many Americans, it won't be obvious that a government shutdown has actually happened.

Image source: Getty Images.

Government workers could see their income dry up -- for now

Those federal employees who are furloughed will lose their income. But in past shutdowns, the economic hardship proved to be temporary. For instance, in 2013, the White House said that federal workers would receive $2 billion in back pay for the 16 days over which the federal government shut down. Interestingly, some workers actually got double pay, with a court case earlier this year arguing that the Fair Labor Standards Act demanded compensation for not being paid in a timely manner. The government unsuccessfully argued that the lack of authorization from Congress prevented payment, but that didn't stop the court from awarding what amounted to damages for workers.

Expect some high-profile lapses

Even if many essential functions will keep happening in a government shutdown, some very visible things will stop. In past shutdowns, national parks, museums, and other institutions closed down, wreaking havoc on tourists seeking to take advantage of those services.

In addition, the District of Columbia's special status makes it especially vulnerable to federal shutdowns. Because the D.C. budget is approved by Congress, the city has shut down government services in some cases when funding was unavailable. However, if the District chooses to use any reserve funds that have already gotten Congressional approval, then it might choose to keep certain services open even if a shutdown occurs.

A shutdown probably won't happen

Often, government officials have come to the brink of a shutdown only to find a solution to their disputes, and that appears increasingly likely now. Reports indicate that the Trump administration has expressed a willingness to accept a deal that doesn't include funding for a border wall along the U.S.-Mexican border, and that has done a lot to ease tensions between the two major political parties. That's no guarantee of eventual success, but it increases the chances that a shutdown won't happen this time around.

Government shutdowns sound scary, but when they've happened in the past, they haven't been nearly as severe as many had feared. That said, the best-case scenario would be for lawmakers to come to agreement on a way to fund the federal government beyond the Friday deadline so that Americans don't have to see what will happen this time around.

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