The 2013 U.S. government shutdown as a result of partisan battles over fiscal issues is creating ripples across the country, and federal workers of all kinds are being told not to report to work. What might things look like in the coming days and weeks? What does the research say?
President Obama has signed an order so that military members will be paid during the shutdown, but furloughs and closed offices will affect the Department of Defense nonetheless. A 2013 report from the Congressional Research Service (CRS), “Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations,” notes the following:
The most far-reaching authority that affects DOD is authority to continue activities that “provide for the national security.” Even DOD’s authority to provide for national security, however, may be constrained by legal limits on the financial procedures that are permitted when appropriations lapse. Among other things, in order to carry on activities that are permitted to continue, but for which appropriations have lapsed, funds may be obligated in advance of appropriations (i.e., legally binding contractual commitments may be made), but expenditures of funds that derive from such obligations (i.e., the payment of bills with checks or electronic remittances) are prohibited. As a result, though uniformed military personnel and many DOD civilian employees may be expected to continue in their duties during a funding lapse, those normally paid with current-year appropriated funds, including virtually all uniformed personnel and most civilians, will not receive pay until after appropriations become available.
A 2011 report — subsequently updated in August 2013 — by CRS, “Shutdown of the Federal Government: Causes, Processes and Effects,” presents the general mechanics of such a work stoppage for the government as a whole and the complex legal background, and enumerates the broad effects of the previous shutdowns, in 1995-1996.
Under the U.S. Antideficiency Act, select federal agencies and programs must stop operating if and when their funding is not further appropriated by Congress. However, certain core positions in the government will be considered “exempted activities” and will continue to function. These include roles relating to national security, medical care, duties “essential to ensure public health and safety,” law enforcement, and air traffic control and transportation safety functions.
Some of the consequences are not yet fully known, the CRS report suggests: “Programs that are funded by laws other than annual appropriations acts — for example, some entitlement programs — may, or may not, be affected by a funding gap. Specific circumstances appear to be significant. For example, although the funds needed to make payments to beneficiaries may be available automatically pursuant to permanent appropriations, the payments may be processed by employees who are paid with funds provided in annual appropriations acts.”
A full government shutdown last took place for a 21-day period, from Dec. 16, 1995, to Jan. 6, 1996; a related one also took place Nov. 13-19, 1995. These events prompted the furloughing of several hundred thousand workers and had wide implications for the U.S. economy. Important points in the report relating to the shutdowns in 1995-1996 include:
- Health and welfare services for military veterans were curtailed; the Centers for Disease Control and Prevention stopped disease surveillance; new clinical research patients were not accepted at the National Institutes of Health; and toxic waste clean-up work at 609 sites was halted.
- The closure of 368 Nation Park sites resulted in the loss of some 7 million visitors.
- Recruitment and testing of federal law enforcement officials was reportedly cancelled, including the hiring of 400 border patrol agents.
- 200,000 applications for passports and 20,000 to 30,000 applications for visas by foreigners went unprocessed; U.S. tourism and airline industries incurred millions of dollars in losses.
- More than 20% of federal contracts, representing $3.7 billion in spending, were affected adversely.
Of course, there is also talk of the federal government’s impending failure to resolve the impasse over the federal debt limit. The Congressional Research Service distinguishes this situation from that described earlier, where budget negotiations break down:
In a debt limit impasse, by contrast, the government no longer has an ability to borrow to finance its obligations. As a result, the federal government would need to rely solely on incoming revenues to finance obligations. If this occurred during a period when the federal government was running a deficit, the dollar amount of newly incurred federal obligations would exceed the dollar amount of newly incoming revenues. In such a situation, an agency may continue to obligate funds, because it has budget authority available for obligation, provided that appropriations are in place. However, the Treasury Department may not be able to liquidate all obligations that result in federal outlays, due to a shortage of cash, which may result in delays in federal payments and disruptions in government operations.
Another CRS report, “Federal Funding Gaps: A Brief Overview,” issued in September 2013, notes that many “funding gaps” have occurred before for very short durations, and these did not result in full shutdowns. But the report notes that “when a funding gap occurs, federal agencies begin a shutdown of the affected projects and activities, which includes the prompt furlough of non-excepted personnel. The general practice of the federal government after the shutdown has ended has been to pay furloughed employees for time missed, even when no work was performed.”
The Pew Research Center has produced a variety of survey data providing insight on public opinion relating to these issues. The latest numbers suggest the public will likely blame Democrats and Republicans roughly equally.
Tags: Congress, economy, employment