A congressional impasse could disrupt government work on home purchases, unemployment insurance, passports, export financing?and potentially, tax refunds and Social Security payments
It's easy to see why both sides in the Washington budget battle agree?publicly, at least?that they don't want to see the government close down. When federal agencies were shuttered twice, for a combined 27 days, during 1995 and 1996, unemployment and welfare checks stopped, overseas travel was disrupted, economic reports went dark, and home loans were put on hold. House Republicans received the blame and later paid the price in the election booth.
The Obama Administration isn't saying what exactly it will do if the federal government runs out of funding on March 4. Officially, lawmakers insist they will reach at least a temporary agreement on funding levels before then. House Republicans plan to vote next week on a two-week funding extension that would cut $4 billion, while Senate Majority Leader Harry Reid (D-Nev.) has proposed a 30-day extension that maintains current funding. "As the congressional leadership has said on a number of occasions and as the President has made clear, no one anticipates or wants a government shutdown," said Kenneth Baer, a spokesman for the Office of Management and Budget in a statement. Baer further said that the OMB, which would decide which employees to send home if funding stops, "is prepared for any contingency."
The political impact of the 1995-1996 shutdowns was so significant that Roy Meyers, a political science professor at the University of Maryland Baltimore County, says he is surprised that it has become even a possibility again, given the blame Republicans took in opinion polls at the time. Later in 1996, House Republicans lost nine seats to Democrats and Democratic President Bill Clinton was reelected with an 8.5 percentage point popular vote margin.
"The federal government's activities are so wide-ranging it would be a tremendous effort to estimate its impact," says Meyers, who has written about the 1995-1996 shutdowns.
Pentagon, Prisons, and Postal Service
The federal government would never entirely close up shop. Even without funding, the Defense Dept. would remain open. Air-traffic control would continue, as would border patrol, the operation of federal prisons, disaster assistance, and medical care, according to a Feb. 18 Congressional Research Service report. Agencies with funding other than that provided by annual congressional appropriations could also continue, such as the U.S. Postal Service. Beyond a few exceptions?job functions that "protect life and property," according to a July 2010 OMB memo?federal employees can't otherwise work if they're not funded.
The best guide for what consumers of government services can expect came in the last shutdown?the longest in U.S. history. After President Bill Clinton and a Republican Congress couldn't agree on spending, the government twice ran out of funding: from Nov. 14-19, 1995, and from Dec. 16, 1995 to Jan. 6, 1996.
About 285,000 federal employees were sent home without pay and a further 476,000 were forced to work without pay. Clinton said on Jan. 20, 1996, that the shutdowns had cost the federal government a total of $1.5 billion, or $2.1 billion in today's dollars?a number that does not include indirect costs. (The total nonmilitary federal workforce has fallen from 2.92 million at the end of 1995 to 2.84 million at the end of 2009, according to the U.S. Office of Personnel Management.) When the shutdowns ended, all employees had back salaries paid.
Benefit Slowdowns or Outright Cuts
Here is just a sample of the services and benefits that were affected, according to Congressional Research Service reports:
? A shortage of federal funds eventually led 11 states and the District of Columbia to stop providing unemployment benefits when they couldn't or wouldn't fill the gap with their own funds. Other benefits were slowed or stopped entirely: Veterans stopped receiving some payments, including insurance death claims and checks for education provided by the GI Bill. Delays hit recipients of federal welfare programs and adoption-assistance services, along with children in foster care and in the Head Start early childhood program. The Bureau of Indian Affairs closed, cutting off assistance payments to 53,000 people, while about 25,000 American Indians also stopped receiving checks for oil and gas royalties.
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