Government shutdown 101: What would a shutdown mean for you?

People employed by the federal government. Many "ordinary Americans" also happen to be federal employees. The labor union AFGE (American Federation of Government Employees) alone represents some 600,000 federal and D.C. government workers. Employees whose pay is funded through annual appropriations would be furloughed, unless their duties qualify as essential.

A shutdown could be tough on both types of workers. Those who must keep working would be eligible for pay, but the paychecks wouldn't go out until Congress approves a funding package. For nonessential workers, it remains to be seen whether Congress would appropriate money to pay them for time on furlough.

Contractors to the federal government. Compared with the shutdown in 1995, a greater share of today's federal activities rely on private contractors. The shutdown would leave many of them unpaid and at loose ends until a budget accord is reached.

Your representative in Congress. The president and members of Congress, by current law, can't be put on furlough. Less certain is whether staff will be in the office to answer Capitol Hill phones. Lawmakers must decide whether their staff members are essential or not.

The economy. Many forecasters don't expect a large economic impact from a shutdown, assuming it doesn't last long. But from a lapse in many paychecks to a slowdown in tourism and exports, a shutdown is probably a bigger event than, say, a large blizzard.

More broadly, the shutdown could cut two ways for investor confidence in the US economy, depending on how things play out, argues Martin Baily of the Brookings Institution.

On the one hand, investors could become more anxious about whether Washington is able to manage its finances. (Another looming political standoff, over the ceiling on the national debt, could amplify those worries.)

On the other hand, Mr. Baily wrote recently, the outcome could be positive if investors see the turmoil as a sign "that we as a nation are going to get serious about our addiction to debt."

Government shutdown 101:

Introduction: What would a shutdown mean for you?

Part 1: What does it mean for veterans?

Part 2: Will I still have to file my taxes?

Part 3: Will Social Security and Medicare be affected?

Part 4: What does it mean for the military?

Part 5: What does it mean for homeland security?

Part 6: What does it mean for Medicaid?

Part 7: How will it affect unemployment insurance?

Part 8: What does it mean for welfare and food stamps?

-----

Previous

1 | 2