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

If the budget impasse causes the government to shut down after Friday, many ordinary Americans would feel it. Some services deemed 'essential,' though, would continue amid a government shutdown.

Evan Vucci/AP
With the Capitol in the background, a sign points visitors toward the many attractions on the National Mall in Washington, on Wednesday, April 6.

The phrase "government shutdown" sounds serious, and it is. If congressional leaders and President Obama can't reach a budget deal soon for the remainder of the 2011 fiscal year, many federal operations could grind to a halt.

But it wouldn't be a total shutdown of the government. Many services – from Social Security checks to national defense – would continue largely uninterrupted.

As the clock ticks down, with Congress's current funding resolution running out at midnight on April 8, here's a guide to what the shutdown might mean for ordinary Americans.

First, an important caveat: Much about a shutdown remains uncertain. "A lot of information [about the shutdown] just doesn't exist yet," at least in the public domain, warns Roberton Williams, an expert on federal finances at the Tax Policy Center, an independent research group in Washington.

Agencies have been drawing up plans regarding which of their activities will be deemed "essential" and continue to function, even with a lapse in funding authority. The full details would emerge as a shutdown actually happens. And the consequences could deepen the longer a shutdown lasts.

Despite these uncertainties, some things appear clear based on what has happened during past shutdowns, and what some government officials have already said.

General operations interrupted. National parks would close, as would District of Columbia tourist sites such as museums on the National Mall. But the definition of "essential" can be subjective. In a 1995 shutdown, hot line calls to the National Institutes of Health concerning diseases weren't answered. Air traffic controllers were essential, but the State Department stopped processing visa and passport applications.

Social Security. Social Security checks would continue to be paid, but new enrollees might be delayed starting their benefits.

Medicare. In the 1995 shutdown, seniors' Medicare payments flowed as usual. Doctors and hospitals are expecting the same would occur this time.

Postal service. Mail delivery and post office operations should continue as usual, because the postal service operates with its own funding stream from those "forever" stamps and other postage fees.

Military and homeland security. Personnel deemed essential for national security would stay on the job, whether that's in Afghanistan, along the US border, or at an airport security checkpoint.

Taxes. Americans will still need to file their taxes on time (April 18). The Internal Revenue Service has said it will process electronic returns, but its processing of paper returns would be delayed by a shutdown. Will electronic filers get refunds promptly? They may soon find out.

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?


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