From the New York Times (4.6.11):
Federal Departments Lay Out Plans in the Event of a Government Shutdown
By ROBERT PEAR
With the possibility of a government shutdown looming, Obama administration officials raced Wednesday to identify essential government services that would have to be provided if the government ran out of money... A senior administration official said a shutdown could idle 800,000 of the 1.9 million civilian federal workers.
Here are highlights of contingency plans, compiled from federal agencies still sorting out what services would continue:
SOCIAL SECURITY The government would continue to make Social Security payments to the 53 million beneficiaries. “We will continue to process applications for benefits, but it might take longer if a shutdown does occur,” said Mark Hinkle, a spokesman for Social Security. “Our local offices will open for limited services. We are working on the specifics.”
A huge backlog of applications for Social Security disability benefits would grow even larger, agency officials said.
HEALTH CARE Medicare, the program for people who are 65 and older or disabled, would continue to pay doctors and hospitals for several weeks, using money from its trust funds.
The National Institutes of Health would not admit new patients to its research hospital or begin new clinical trials of drugs, devices or other treatments. However, research studies already begun would continue...
TAXES. The Internal Revenue Service would not audit tax returns and would not issue refunds to taxpayers who file returns on paper. But the agency would process returns filed electronically, a majority of all filings, and would issue refunds for those returns.
FOOD STAMPS Since the government makes the money available to states by the beginning of each month, advocates for food stamp recipients predicted no immediate impact on benefits. “They should be O.K. for the month of April,” said Stacy Dean, a food stamp expert at the Center on Budget and Policy Priorities...
LAW ENFORCEMENT the Justice Department would curtail or stop work on most civil litigation...
Consequences of a Shutdown
Please review and circulate below information.
- Outside economists have said a shutdown will hurt our recovery and slow economic growth, and the Speaker admitted it will cost more than it saves.
- If a shutdown should occur, small businesses -- the engine of our private sector job growth – would wait for loans from the SBA, Americans who filed a paper return would wait for their IRS refund check, and mortgage lenders could cease lending because FHA wouldn’t be able to guarantee their loan.
- Two years after a devastating recession, we learned last week that more than 1.8 million jobs have been created in a little over a year. It is the height of irresponsibility to allow a shutdown just as our economy is starting to recover.
These critical services would not cease:
- Social security checks for seniors, people with disabilities and survivors would still go out.
- Troops would be able to continue to serve.
- Critical homeland security functions such as border security would continue.
These critical services would likely cease:
- FHA new home loan guarantees may cease. During spring home buying season, this suspension of new issuances could have a gravely adverse effect on recovery of housing market. Private mortgage lenders across the country could suspend new home loan closings as a result of having no assurance those loans will be guaranteed. 30% of the market is FHA loans.
- SBA approval of applications for business loan guarantees and direct loans to small businesses would likely cease, impacting the engines of our economy, which could slow economic momentum.
- IRS processing of tax refunds for paper-filed returns (approximately 30% of total), and performance of tax audits, would be suspended.
- Operation of E-Verify activities by DHS will be suspended – which could slow down new hiring.
- Patent processing will be suspended.
Other areas that would cease:
- All areas of the National Park and National Wildlife Refuge Systems will be closed. Limited access to public lands would adversely affect communities that depend on recreational tourism.
- Smithsonian Institution and National Gallery of Art will close to the public (although Kennedy Center will remain open, due to significant private funding sources).
- District of Columbia: DC Trash collection would be suspended for first 3 days of funding lapse. DC Public Libraries (except for security), and a variety of District offices that perform non-excepted functions, including the Department of Motor Vehicles, would suspend operations.
- Rep. Boehner Said, “If You Shut The Government Down, It’ll End Up Costing More Than You’ll Save Because You Interrupt Contracts…” “‘If you shut the government down, it’ll end up costing more than you’ll save because you interrupt contracts – there are a lot of problems with the idea of shutting the government down – it is not the goal,’ Boehner said Friday outside his office suite in the Capitol.” [The Hill, 4/1/11]
- Business Roundtable highlighted the negative impact on the U.S. economy and that a shutdown could impact the recovery’s momentum.
Ivan Seidenberg, the business group’s chairman, said even a short shutdown would put this prospect at risk. ‘I don’t think any of the CEOs would welcome a government shutdown,’ said Seidenberg, also the CEO and chairman of Verizon Communications…. Seidenberg said problems for business from a shutdown would run from contracts being postponed to disruptions in the supply chain. He also said companies could have a hard time getting approvals for various licenses approved by the government. Business Roundtable President John Engler said business would also face the danger of the ‘law of unintended consequences.’ Interest rates could rise because of a shutdown, and there could be turmoil in financial markets, according to Engler, a former Republican governor of Michigan.” [The Hill, 3/30/11]