13 ways a government shutdown could hurt you

If it happens at midnight Friday, expect financial markets to be rattled, agencies to be ill-prepared and the public to be inconvenienced.

By MSN Money Partner Apr 6, 2011 9:11AM

Government Shutdown from The Fiscal Times on MSN MoneyGovernment Shutdown: Image: Washington, D.C. (© Radius Images/Jupiterimages)By Maureen Mackey, The Fiscal Times

 

In an appearance in the White House briefing room Tuesday, President Barack Obama urged congressional leaders on both sides of the aisle to resolve their differences over a budget deal that would avert a government shutdown. But as the possibility of a shutdown by the end of this week moves into sharper focus with each passing hour, all eyes are on the ways it would hurt Americans.

 

In 1995, when funding for the government expired, nonessential services came to a halt. National parks were shut down, museums were closed, and passport processing was delayed. Even the National Weather Service cut back on its regular reports. But the catch, this time as then, is that there are no hard-and-fast rules on what is considered essential versus nonessential. In coordination with the Office of Management and Budget, the president has broad discretion over which departments and agencies should be kept open, making it difficult to quantify how much it would cost the government -- and how it would affect the public -- if a shutdown were to happen.

 

"Although a government shutdown would be disruptive, the impact will depend on the duration and the degree, on how tight or loose the exceptions are," Patrick O'Keefe, the director of economic research at J. H. Cohn and a former deputy assistant secretary in the Department of Labor, told The Fiscal Times. "But the bigger impact is its demonstration of political impasse regarding the country's unsustainable fiscal posture. The financial market implications of such an impasse should not be underestimated."

 

"I don't think there is a full appreciation of the impact of a shutdown on the bottom line of government," said Max Stier, the president and CEO at the Partnership for Public Service, a nonpartisan think tank. "Most agencies are ill-prepared for the disruption."

 

Last week, a significant majority of Washington budget and policy experts surveyed by The Fiscal Times said they expect a government shutdown of at least a few days after the latest stop-gap spending measure expires. The government has been operating under a series of fiscal 2011 continuing resolutions for the past six months, and unless President Obama, GOP congressional leaders and top Senate Democrats can cut a deal for the rest of the year, the shutdown may become a reality beginning midnight Friday.

 

There's no question it would inconvenience the public in ways large and small. Consider some of the impacts of the three-week shutdown in 1995-1996 -- all of which could be repeated this time around:

  1. New patients were no longer accepted into clinical research at the National Institutes of Health. In addition, NIH disease hot lines and CDC disease surveillance were stopped.
  2. Work on more than 3,500 bankruptcy cases in the federal court system was suspended. 
  3. Hundreds of thousands of "nonessential" federal workers were furloughed for three weeks, from mid-December 1995 to early January of 1996. (Some of those workers eventually received back pay for their missed days.) 
  4. Of $18 billion in Washington, D.C.-area federal contracts, $3.7 billion (more than 20%) were affected adversely by the funding lapse.
  5. The National Park Service closed 368 sites, for a loss of 7 million visitors. The National Park Service administers 84.4 million acres of federal land in 49 states and other federal territories. Since 2008, park visits have totaled 285 million annually.
  6. National museums and monuments closed, including the Smithsonian and other government buildings, with an estimated loss of about 2 million visitors.
  7. More than 600 toxic waste dump sites went untended and uncleaned during the last shutdown. About 2,400 Superfund employees did not work.
  8. The recruiting and testing of new law enforcement officials -- including 400 Border Patrol agents -- were suspended.
  9. During the last shutdown, 20,000 to 30,000 applications for visas by foreigners went unprocessed each day, along with 200,000 applications for U.S. passports. Airlines also suffered, as many prospective travelers were unable to fly.
  10. The Department of Veterans Affairs had to cut many of its services -- including health care, welfare, travel and finance -- as the department could not process compensation claims.
  11. The shutdown meant a delay in processing alcohol, tobacco, firearms and explosives applications by the Bureau of Alcohol, Tobacco and Firearms.
  12. The National Weather Service did not produce its regular reports.
  13. New Social Security claims were not processed, because the agency furloughed more than 61,000 employees. As the shutdown continued, the agency regrouped, recalling workers to start processing new claims again.

It's clear that government shutdowns can be nasty business: They have required the cessation or the reduction of government activities and affected all sectors of the economy, according to a report by the Congressional Research Service.

 

Former House Speaker Newt Gingrich was one of the architects of the 1995 government shutdown, which lasted 21 days. It was settled when President Bill Clinton submitted a budget that proposed to eliminate the federal deficit in seven years, according to Time magazine.

 

The issues that were presented then and ultimately triggered the shutdown were the same as today's, according to June O'Neill, who was the CBO director. Congress couldn't agree on a budget resolution for the coming year and was haggling over whether to raise the debt ceiling, she said. The economy was also recovering from the 1991 recession, and growth was sluggish -- similar to today. "There was a great deal of posturing then as there is now," O'Neill said. "The world would come to an end if the debt ceiling wasn't raised."

 

But in 1995, it was more about Gingrich proving he was just as powerful as the Clinton administration, she says. Even though the government faces a larger deficit and there are divisions on spending cuts, it's not about the politicians today.

 

Tuesday afternoon, House Speaker John Boehner and Senate Majority Leader Harry Reid tried to reach a budget deal during a Capitol Hill meeting. The meeting lasted less than an hour, but the two men "agreed to continue working on a budget solution," spokesmen for the two said in separate statements.

 

More from The Fiscal Times:

VIDEO ON MSN MONEY

30Comments
Apr 6, 2011 12:34PM
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Let's make sure that the congress goes home with no pay during the shut down.

The President does not spend the money the House is the spender with approval of the Senate,  the President can submit but not enforce.

Apr 6, 2011 10:45AM
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I hope the VA can still get me my meds.

There's nothing worse than a Viet-Nam vet with PTSD unmedicated with a gun collection...Baring teeth

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Ok then...............0 for 13.............shut the bltch down, now and permanently!

 

 

As soon as the government shut down happens, the govenors should convene a continental congress and have a vote of no confidence in the U.S. Federal Government, and then we start again, this time as simply as possible!

Apr 6, 2011 10:23AM
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 It was settled when President Bill Clinton submitted a budget that proposed to eliminate the federal deficit in seven years,

Sounds to me like the last shutdown worked pretty well.

Apr 6, 2011 3:00PM
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I don,t care if your a Republican or Democrat

 

        They don't agree, they can't get along, all the while they get little to nothing done.

I believe they would rather watch the country fall, than to stand as an individual and

go against there party.

 

         Get back to the basics this country was founded on, and remember you get payed by

the people, so do the job for the people.. Or step down. We would all be better off.

Apr 6, 2011 11:54AM
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I especially liked #3 which states that some of the furloughed employees ended up getting paid for their three week vacation.  Don't get me wrong, I think they should get paid, it's just another big government waste, forcing people to take time off and then turning around and paying them for it.  They should have just kept them working!
Apr 6, 2011 1:57PM
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Perfect- 'the dems vs. the reps'- we need to quit the two party mentality- as long as the people are divided, we the people will never get anything accomplished-look past the headlines, see what the real agenda is...there is no two parties- the agenda is the same, using differing tactics...I don't claim to have an answer, but watching the same old propaganda work time after time is rediculous
Apr 6, 2011 12:11PM
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2/3 of Federal Spending is Entitlements.

40% of every Federal dollar spent is borrowed.

You keep hearing people say: "If they cut subsidies or foreign aid or military or handouts to corporations.....". 2/3 is entitlements. 40% is borrowed. That means you could cut everything but entitlements and still not be in the black.

The Federal Budget for Military, Law Enforcement, Education and Roads all could be cut to ZERO, and they still would be in the RED.

The Democrats are being FORCED to cut $30 billion, we all know they would cut nothing if there was no pressure from the TEA party.

The deficit is $1,600 billion this year.

The TEA Party wants to cut $100 billion, and that's extreme?

That still leaves a $1500 billion deficit this year.

Thank goodness for the TEA Party.

The Republicans spend like drunken Democrats.

And the Democrats spend like Liberals on Crack.

We have not had 1 year in the last 40 with a surplus. We have had to borrow money every year! (Clinton came within $17 billion one year).

So it's time for change - to a pathway to solvency.

Apr 6, 2011 12:11PM
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Bill Clinton ended the last shutdown by promising to balance the budget in 7 years. And he did just that right away. He raided the Social Security Trust fund, moved it to the General Fund and replaced the SSTF contents with non-negotiable IOUs from the US Treasury. An accounting gimmick.

 

Since that real money is long gone, I suspect .gov will look for a way to grab our IRAs in return for even more IOUs. It would not surprise me one bit. 

Apr 6, 2011 2:28PM
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I have to wonder just how much money will be saved by the government not operating.

 

I do know one way to save money however, stop the war on drugs, stop sending non-violent drug offenders to prison, stop sending troops to the middle east. Want to inject real money into America? Start by having the returning military personel help rebuild our infrastructure that is now falling apart in many places. That way they not only have jobs to look foreward to for any who want it, but money is beign spent on something thats actually useful.

Apr 6, 2011 10:49AM
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problem this time is these places such as the meusems and parks are a few of the only places making money to upkeep themselves, shutting them down turns away millions and the ability to self provide, making them fully reliant on the gov. a couple of the meusems have over a half a million reservations for april alone. good by revenue, hello higher taxes to cover the backfire
Apr 6, 2011 11:49AM
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I expect the shutdown to happen because it's not possible to come up with a budget that's going to work with our countries financial situation.

 

The options I've read were: Default, raise the debt celing, pedal student loans, or sell off our gold reserves.

The last 3 options do nothing but buy us time, and because nothing is changing regarding the trade deficits and unemployment situation we'll find ourselves back at option 1..default.

Apr 6, 2011 2:21PM
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People seem to forget that the politicians never go without, and break the law regularly.  I mean no politician who is ever caught breaking the law is held accountable.  I think we so soon have forgotten, about all the people Obama proposed for cabinet positions.  Like the one who owed $117,000, in back taxes.  Then there is the one who failed to report the illegal immigrant working as his maid.  Of course who could forget the fossilized idiot from representative from New York, who got a slap on the wrist from his peers.  Although even after getting caught breaking the law, which you and I would be burned at the stake for.  He gets sworn in for his what was it 15th term in office I believe.  Then again there is always the back room deals, Bush cut before leaving office with regards to the bailout.  I mean hell people there are no consequences for these law breaking bottom feeders.  By the way after doing those things we still end up paying them, for the rest of their lives.  So it makes sense to go into politics it's the best way to make crime pay, and get away with it!!!!!!!!
Apr 6, 2011 1:14PM
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I worked for the local housing authority the last time there was a government shutdown. We weren't affected because the checks for the moochers never stop. The government isn't  afraid of you, John Q. Taxpayer, they are afraid of the moochers.
Apr 6, 2011 1:36PM
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America is never safer than when Government goes on vacation.  The government isn't afraid of the moochers, they count on them to get afraid and yell and scream to give them more and to plead total poverty if the Republicans don't cave in.  We've all seen and heard these threats and pressure from the dem/lib/socialists before.  They put pressure on those who get scared and little old ladies depending on social security begin crying and wringing their hands, and the dem/lib/socialists get their way.  Are we all idiots?  We are now aware of the fact that the democrats have been using our tax dollars to purchase votes and to create a socialist empire with them as the bosses.  Instead of things getting better, food costs are going up, gasoline is way up, and the democrats are telling us that they're going to raise our taxes yet again.  By the time they're done, we'll all be living in tent cities.  Let the Republicans do what they can this time, and don't force them to back down.  We need them to cut spending and stop taking more money from us and we might not have as many poor.
Apr 6, 2011 11:03AM
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ID (ANGNOS)

 

May I make a suggestion? Perhaps you could focus that PTSD and ammo problem @

any Military funeral that Westboro church wants to protest. I'm sure ANY military honor guard and the fallen soldiers family would love to have you there to "comfort" them by keeping an eye on the protesters. I know I would sleep better with you there.

 

 

 

Apr 6, 2011 3:53PM
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"I don't think there is a full appreciation of the impact of a shutdown on the bottom line of government," said Max Stier, the president and CEO at the Partnership for Public Service, a nonpartisan think tank. "Most agencies are ill-prepared for the disruption."

 

Translation:

I know the people are aware the government is a bloated with bureaucrat lifetime employees that cannot get fired for anything other than murder. I as the president and CEO of Partnership for  Public Service will also not be getting my money while the government is shutdown. Most agencies like the one I work at  produce nothing and are not necessary and we are not prepared to actually work and produce something to compete in the marketplace.

Apr 6, 2011 2:18PM
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This article is a JOKE!  More spin for the Obama spin machine.

New material folks at NBC, new material.......this is not NEW ! (recycled)

Apr 6, 2011 3:33PM
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SO? Why are those things being funded by the government in the first place? Not a single one of them could not be done by the private sector, and at lower cost and with better results. Not a single one of those functions is vital to my life or security.
Apr 6, 2011 4:00PM
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get rid of that piece of sh*t in the white house and our country will go back to OK
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