Will the government shutdown for real this time? What happens to payments for workers, contractors and veterans?
The stop-gap bill to fund the government till April 8th is set to expire with no deal currently in place for further extensions. Unless a deal is reached by Monday, 11th April 2011 – many federally funded workers may be shut out from work next week.
Will Military, Contractor, and Federal Employee Pay Checks Stop?
Not initially for current recipients, though there maybe some delays in payments being made. Non-essential federal workers may be furloughed (i.e a few days off work without pay), and Congress won’t be able to pass any new appropriations bills. Salaried employees will likely see no interruption in their payments, though hourly or contract workers may see temporary pay freezes since they will not be working.
During the mid-90’s shutdown Federal employees didn’t get paid,though they did get their back-pay checks later. The first shutdown, from Nov. 13-19, 1995, resulted in the furlough of about 800,000 employees (which is a similar number to today). During the second, from Dec. 15, 1995-Jan. 6, 1996, about 759,000 were either furloughed or worked without pay, according to the Congressional Research Service. If a shutdown occurred it would probably only affect 40% of federal employees, who are funded by the appropriations legislation that Congress is trying to renew.
A shutdown would close veterans’ benefits offices, including claims processing, and could lead to delays in non-emergency or new appointments. Since disability and pension checks and GI Bill benefits are paid at the beginning of the month, no impacts would for recipients would be felt till May.
For the most part, military personnel remain on the job and continue to be paid. Civilian, contract and consulting workers would have to stop working and hence would not be paid
Contractors – Your employment and pay depends on which agency you are working for. Some agencies have told contractors that they could be locked out of their offices or forced to cut short any government-funded travel or RFPs. If contract jobs are suspended, contracting firms may ask employees to complete overdue training programs, take vacations (paid/unpaid). Worst case, some firms may need to furlough employees.
Excepted or essential workers would also continue working and receive their paychecks. This includes federal employees involved in national security as well as the military, FBI officials, and border and coastal protection personnel.
Interestingly, Congress and the President are also exempt from the funding cuts and will continue to be paid despite the fact that other services are suspended.
Other government and military services potentially impacted by the shutdown: (source CBS news)
– Social Security administration: Checks for seniors, those with disabilities, and survivors would go out as usual. But Social Security Administration employees could face furloughs, but the agency is still finalizing its plan.
– Homeland Security: Critical functions, like border control, would continue.
– Mail delivery: The U.S. Postal Service is owned by the government but self-funded – so operations would continue uninterrupted.
– Air traffic control: As a function of maintaining public safety, Air traffic control would be exempt from a shutdown.
– National parks and monuments: As the New York Times puts it, “The National Zoo would close, but the lions and tigers would get fed.” National parks and museums, including those on the National Mall, like the Smithsonian, would shut down – just in time for spring break.
– Passport operations: All operations would be likely suspended, except for in cases of emergency.
– International Revenue Services (IRS): The IRs would close, but the April tax deadline would stay in place – so Americans would still have to pay their taxes on time. But according to the senior administration official, the processing of paper tax returns (which accounts for about 30 percent of all returns) would be suspended – as would refunds associated with those returns.
– The U.S. Small Business Administration (SBA): The SBA, which is dedicated to supporting small businesses, would suspend approval of applications for business loan guarantees, as well as direct loans to small businesses.
The Federal Housing Association (FHA): The FHA would be forced to suspend approvals for new loan guarantees during peak home-buying season, according to the administration official.
Medicare: According to the administration official, Medicare is funded for the short-term – and would likely remain unaffected unless the government were to remain closed for a period of months or more. NIH, however, will not be able to accept new patients or begin new clinical trials.
Uniformed military personnel would continue to serve, but they would not get paid for their work until the government reopened. (Troops would get one week, not two weeks, pay in their next check, as the shutdown would go into effect in the middle of a pay cycle.) And a number of Pentagon civilians, State Department officials and USAID staff would likely be furloughed.
Veterans Administration receives its yearly appropriation in advance and thus has the money to fund services for the rest of the year.