Tuesday, February 22, 2011

Government Shutdown: T Minus 10 days and counting

Tomorrow, February 23, we can start the count down toward a government shutdown.  Unless both sides come together and compromise, the government will run out of money on March 4.  This compromise can include either fund the government at its current levels or at a reduced level.  If nothing gets done, the federal government will be closed for business.   

What is it?

A government shutdown completely stops providing services that are not considered "essential."  If this happens, it won't be the first (nor the last) time the government has shut down, and like before, we will bounce back.  We always do.  However, it does have a huge impact on millions of American lives.  In 1995, the government shutdown because the Republican-controlled Congress and the Clinton White House couldn't pass the budget (does this sound familiar to anyone else?). 

How did we get here?

Politics, finger pointing and blame aside...
The new Fiscal Year (FY) 2011 started October 1.  At that time, the federal budget put forth by President Obama had not been approved by Congress.  As a result, the government continued operating on a continuing resolution (CR) until the new budget's approval.  Basically, a CR continues funding for most federal programs at the FY2010 level.  A CR must be passed by both congressional bodies and signed by the president.  Additionally, a CR is given a deadline.  A formal budget must be passed, or the CR extended, by congress and signed by the president to avoid a government shutdown.  Currently, the most recent CR has been extended several times.  On September 29, since the government didn't have an approved budget, congress passed a CR through December 3.  Since that time, it has been extended 3 times, most recently on December 21, which is set to expire March 4.  Most of the extensions have been party-line votes.  With the Republicans taking over congress in January, most in the government knew there would be a showdown come March 4.  As we've discussed here on our blog, and making political headlines daily, the Republican House of Representatives want to cut over $60 billion from the current federal budget.  The Democratic Senate has refused to pass the House version of the budget and President Obama has gone on record saying he will veto the House version if their cuts go too deep.

So what happens if the government shuts down?

If the CR isn't extended or a new budget approved by midnight on March 4, come March 5, major portions of the federal government will become inoperative.  If President Obama and congressional Republicans do not reach an agreement on how to fund the federal government, many government agencies will be affected.  Some military veterans might not receive benefits from the Veteran's Administration, people will not be able to file for disability or retirement benefits - children won't be able to apply for benefits of their deceased parents.  The State Department won't be able to issue passports, and museums and national parks would close.  Not just the employees of the federal government would be impacted.  All the restaurants and vendors that rely on federal employee business will be affected.  Hotels and convention centers where parts of the federal government are tourist draws, like Philly and Washington DC, could suffer.  Government contracting firms and their employees who rely on the government for their pay will also be out of work and suffer.  Cities and states that rely on federal funds would also have an even greater shortage of cash potentially affecting their workers. 

If prior shutdowns are any indication, agencies like Homeland Security will be operational.  Usually, some employees for the departments of Defense, Justice and State department are considered "essential."

Self funding agencies like the Postal Services should run - so you should get your mail.

After that, millions of government workers (myself included) will be forced out of work and potentially not paid for an unknown amount of time.  Even if some federal workers wanted to continue working without pay, they could face fines or imprisonment for violating a federal law that prohibits agencies from accepting volunteer labor. 

Under the Clinton administration, there was no Federal Government for more than 20 days.  Nearly 800,000 employees were furloughed or out of work.  The shutdown in 1995 costs tax payers almost $1 Billion.  While some agencies choose to pay their employees their lost wages due to the shutdown, not all do.  This will cost jobs and take money out of the economy.  

A shutdown can be avoided by either passing a budget, or extending the current CR.  Extending the current CR may be the best option at this time as it would be a temporary fix until the larger issue is resolved. 

Is a shutdown worth it?

Should it even be an option?  Should there be a federal law prohibiting the government shutting down?

If the government shuts down, who is to blame?  President Obama and the Democrats or the Republican congress and the Tea Party?
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