What Happens If the Federal Government Shuts Down?
As the prospect of a Federal Government shutdown looms large over the United States, millions of Americans, federal workers, business owners, and countless observers around the globe are curious about what will result from a temporary government shutdown.
In 1996, the Federal Government shut down for 21 days. And while comparisons are already being made, some political scientists are quick to point out that times have changed, and so too may the consequences of a shutdown.
“Basically, everything that is funded by the federal government won’t be, and isn’t funded any more, so it stops. It comes to a screeching halt,” says Dave Rausch, a Political Science Professor at WTAMU.
Although the full scope of ramifications would largely depend on the length of the shutdown, government experts say, there are several developments that will be felt immediately as a direct result of U.S. lawmakers failing to reach a consensus on budgetary spending cuts.
Chief among the negative fallout from a government shutdown will be the army of federal workers trapped in a state of employment limbo. According to the official estimate, approximately 800,000 workers could go without a paycheck once the shutdown commences Friday — tonight — at midnight EDT.
If you’ve already submitted your taxes and are expecting a refund, your check may not reach the mail for quite some time. If the government shuts its doors Friday, the IRS will cease to continue processing paper tax returns (electronic processing will continue). The IRS, however, will not change the tax-return due date of April 18.
In the big picture, a temporary loss of paychecks and a delay in income tax refunds won’t pose the only financial impediments to many. During a government shutdown, the Small Business Administration will effectively stop making loans. Conversely, federal home loan guarantees will also be shelved.
Although certain vital government services — particularly those pertaining to national security — will continue as usual Monday, defense and medical research certainly aren’t immune to the fallout from a government shutdown. U.S. troops, for example, would be paid through April 8. Afterward, all payments to members of the military would be suspended until further notice.
In accordance with federal law, members of the U.S. Congress will still draw their salaries during the shutdown.
The U.S. Postal Service will continue to operate, although the issuing of regular passports and visas will stop. Emergency visas and passports are considered an exception and will be processed, as will Social Security checks. It should be noted, though, that any questions you may have regarding Social Security and Medicare will likely fall on deaf ears during the shutdown. The workers employed to answer those questions will all but certainly be among those not reporting for Monday if the shutdown is still in effect.
Many veteran’s services won’t be affected, according to the Department of Veteran’s Affairs, although national hotlines and call centers will close. Officials still on the clock are presently advising people to call ahead Monday before going to any appointment or following through on a planned visit to a government agency to see if, in fact, the office is still open.
Although a deal could come at any time to ward off the prospect of a full-fledged government shutdown, it now appears that Congressional Democrats and Republicans will be unable to make peace and strike a consensus on spending before tonight’s looming deadline. Hang tight!
Michael Essany is a business writer for Intuit and is passionate about solving small business problems.