Safe Online Banking Online Banking

News

What You Need to Know About Government Shutdowns

January 24, 2018

After experiencing a government shutdown for about a half-week, you may have been wondering what longer shutdowns mean for you. Which government offices and agencies stay up and running, and which of them are shuttered until the shutdown ends?

Here’s what you need to know about government shutdowns.

What is a government shutdown?

A government shutdown is an official closure of all nonessential government offices due to a lack of approval of the federal budget for the approaching fiscal year. Approval can only be reached if Congress passes every one of the spending bills related to the federal budget. If no agreement is reached, the shutdown continues, forcing many federally operated programs to halt all their work and services. Some programs will stay open, operating on a contingency plan. Others will subsist on cash reserves for as long as they last.

In short, a shutdown cannot be resolved until a compromise is reached and a spending bill is passed.

What happens to government employees?

A government shutdown doesn’t mean an extra week’s vacation for federal workers. Quite the contrary, as thousands of federal employees are placed on furlough, or on unpaid leave. In previous shutdowns, government workers who went on furlough were paid retroactively once an agreement was reached and the shutdown ended.

There are many government programs that are considered essential, and keep operating as usual. However, most of these workers are not paid for their work.

Which government agencies are affected by shutdowns?

As mentioned, all essential government agencies are typically running as usual. Several of them will be understaffed until the shutdown ends, and many employees are not getting paid for work done during the shutdown. In addition, here’s how a shutdown will affect various federal agencies and divisions:

1.) Military

The military is considered an essential agency, and all overseas operations will be executed as usual. Military personnel are expected to report to work as usual, and according to The Washington Post, they are paid in full unless the shutdown stretches on.

It’s important to note, though, that many civilian Department of Defense employees are not working during shutdowns, including military academy instructors and private maintenance contractors.

2.) Veterans’ Affairs

More than 335,000 of the VA’s 377,000 employees are expected to continue working throughout a shutdown.

3.) Social Security

Social Security checks will be distributed on schedule, and most of the SSA’s staff will continue to work despite the shutdown.

4.) Postal Service

Neither rain, nor snow, nor government shutdown can keep your mail carrier home. Though the Postal Service is a government-owned agency, it operates on its own stream of revenue and is not affected by the shutdown.

5.) The Justice Department

Criminal litigation will proceed as planned and all courts will continue to operate as usual throughout the shutdown.

6.) Housing and Urban Development

Only 300 of the Department of Housing and Urban Development’s 7,800 employees are exempt from furloughs. Since it’s operating with only a fraction of workers, the department continues to provide essential services – like housing for the homeless – but private applications for government housing aid will likely be delayed.

7.) Education

The DOE’s contingency plan calls for upward of 90% of its staff to be furloughed during the first week of a shutdown. Only 6% of its staff is expected to return to work if the shutdown lasts more than a week.

8.) Passports and visas

Passport and visa applications will be processed as usual, but many applicants will experience delays due to some shuttered processing facilities.

9.) White House

During the January 2018 shutdown, 1,056 members of the Executive Office of the President were placed on furlough, while 659 workers are considered essential and continue to report to work. All furloughed staff was expected to report to work on Monday, Jan. 22. However, they were only allowed to remain in the building for four hours and to engage in “shutdown activities” such as setting out-of-office messages and issuing instructions for non-furloughed colleagues.

10.) TSA and air traffic control

The TSA and air traffic control are deemed essential and therefore operate as normal.

11.) Homeland Security

Close to 90% of the Department of Homeland Security’s employees are considered essential and work as usual.

12.) National parks and landmarks

In 2013, national parks were closed to the public during the government shutdown. However, during the 2018 shutdown, national parks, recreation areas and monuments remained in full operating mode. Most landmarks, such as Independence Hall in Philadelphia, were closed. The Statue of Liberty, in New York, reopened with the city picking up the tab for operating costs.

Economic effect

Government shutdowns have always had a devastating effect on the economy. With loan processing delayed and halted, attractions shuttered and thousands of businesses that rely on the patronization of furloughed workers suffering a loss, the economy can take a hard hit. In the past, an estimated $20 billion in revenue was lost during a shutdown. Had the 2018 shutdown extended further, with many parks and recreational centers operating as usual, the losses may not have been as severe.
Congress works hard when trying to reach budget plans to satisfy all parties. Hopefully, if shutdowns do occur, an agreement is quickly achieved and the shutdown comes to an end.

Categorized in: Your Money Info

Leave a Reply

Your email address will not be published. Required fields are marked *

Thank you for visiting our website

The products and services offered on 3rd party sites, including investment and insurance products, are not products of Schneider Community Credit Union and may not be insured by the FDIC or NCUA. Schneider Community Credit Union does not maintain or control privacy or security on these sites, and as such, makes no guarantees as to the privacy of any information you may provide or disclose while on these sites.