Market Overview

The Pending U.S. Government Shutdown: What Does It Mean For You?

The nation is facing a potential government shutdown for the first time since 1995. If the House and Senate cannot agree on a spending bill by midnight Monday, a shutdown seems likely.

Here are some basic questions (and answers) related to a government shutdown:

When would the shutdown begin?

According to USA Today, the shutdown of services would begin at midnight Monday, although furloughed government workers would report to work Tuesday for a few hours in order to close their offices.

When would a shutdown end?

Once Congress agrees on a spending bill and the President signs it, everything would open back up. Practically speaking, following a shutdown at midnight Monday, government doors could reopen around noon Wednesday.

How long would the shutdown last?

Most government shutdowns (there have been 17 to date) have lasted two or three days. The longest lasted 21 days.

Which government services would continue?

A number of government services and activities are considered essential and would continue.

According to The Huffington Post, they include:

  • Mail delivery
  • Social Security payments/applications
  • Unemployment benefits
  • Medicare claims (although payments to doctors and hospitals would be delayed)
  • Food stamps
  • Essential or emergency food and workplace safety action
  • Release of economic data
  • Disaster-related activities
  • School lunch programs
  • FHA and VA mortgage loans
  • Burial benefits for veterans
  • Tax collection by the IRS (due April 18)
  • Military remain on duty (although pay could be delayed)
  • Air traffic controllers
  • Federal prisons
  • Federal litigation

Which services would be halted?

Among government services and activities that would be curtailed or closed are:

  • National parks
  • The Smithsonian, National Zoo, Holocaust Museum and most other museums in Washington
  • eVerify (which checks the status of immigrant workers)
  • Federally-backed loans for small-business owners, rural communities, and some home buyers
  • Tax refunds (delayed)
  • IRS audits and most taxpayer assistance including walk-in and telephone hotlines
  • 800,000 to one million government employees furloughed
  • Funding for WIC
  • Passports and visas
  • Veteran compensation for service or combat-related wounds and injuries
  • Workplace safety inspections (non-emergency)
  • Research at the National Institutes of Health

Would the Affordable Care Act (Obamacare) be affected?

No. State-run exchanges would open as planned Tuesday. Although the main conflict between Republicans and Democrats has to do with funding Obamacare, the Affordable Care Act is a permanent entitlement not subject to annual Congressional funding.

Related: Obamacare May Cost Far Less than Businesses Thought

What about Washington D.C?

The District of Columbia relies on money from Congress to operate. Although the Mayor said he planned to deem all city employees “essential” it is likely city departments, including trash collection would shut down for the duration of any government shutdown.

Would Congress continue to be paid during a shutdown?

Yes. The 27th Amendment to the Constitution, ratified in 1992, which prevents Congress from voting itself a raise, also protects members from a pay cut.

What about the nation's economy?

Economist Mark Zandi told USA Today that a short shutdown of a few days would have little impact, but one lasting a month or more "would do significant economic damage."

How would Wall Street be affected?

The impact of a government shutdown on Wall Street would probably be negative at first. The S&P 500 fell more than 3.5 percent during the 1995 shutdown, but rose 10.5 percent in the month after the government reopened according to USA Today.

Posted-In: Mark Zhandi obamacare shutdownNews Politics Events Media General Best of Benzinga

 

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