What Does a Government Shutdown Mean to Me?
Why does the federal government shut down? It's all about money.
If the United States Congress does not pass a new spending bill before the previous bill expires, then the government is legally prohibited from spending money, resulting in a government shutdown.
The fiscal year runs from Oct. 1 through Sept. 30, meaning a new spending bill must be passed before midnight on Sept. 30th. There have been multiple shutdowns over the years, though most last only a few days. The longest shutdown was 35 days and lasted from Dec. 22, 2018 to Jan. 25, 2019.
Obviously, if you work for the federal government, a shutdown could mean no work and no pay until the situation is resolved. Even if you aren’t an employee of the federal government, however, a shutdown of the national government could be more than a minor inconvenience. Here’s a quick rundown of all the ways a government shutdown could impact you.
You could be put on furlough
This is only a concern if you work for the Federal government. All employees deemed “essential” would maintain their jobs at full capacity. Each government agency creates their own contingency plan and names which positions they consider essential. Those contingency plans are then reviewed by the White House.
Workers deemed to be necessary to the protection of public health and safety are considered to be essential, but that includes the protection of both citizens and property, which may include important data or other intangibles.
Essential services include:
- Military and national security agencies
- Air traffic control and TSA
- Healthcare workers in federally funded facilities
- The U.S. Postal Service
- Social Security, Medicare, and Medicaid administration (though likely not at full capacity)
Non-essential services include:
- National parks and museums
- Regulatory agencies like OSHA and the FTC
- Permit and licensing administration, including passports and visas
Ultimately, CNN estimates approximately 783,000 or more workers would be placed on furlough – a little less than 25 percent of the 3.3 million government workers.
National parks will be closed
All sites within the National Park Services will be closed, with no services available. Anyone camping in a national park will be given two days to leave.
Passport services may be reduced
According to the Department of State, all consular services will remain open as long as the revenue from fees is sufficient to maintain operations. These services will likely experience a significant slowdown, however, even as they remain open.
Tax refunds will be delayed
If you filed an extension on your tax returns, those extensions expire on Oct. 15, which means that a fair number of returns are filed in the fall. Those returns – if submitted as paper returns – would face delays in processing, resulting in a delay in refunds being generated.
IRS audits will be suspended
All audit activity conducted by the IRS would be suspended during a shutdown. Additionally, walk-in taxpayer assistance centers and telephone hotlines would be closed.
New federally-backed loans will be frozen
Federal loans for things like small businesses will not be processed during the shutdown, however, both the Federal Housing Administration and the Department of Veterans Affairs have stated that FHA and VA loans will still be approved and administered during a shutdown. Those departments may not be running at full capacity, though, meaning delays are likely.
The hope is always that any government shutdown will be brief, but no matter how long it lasts, there will be disruptions. If you've experienced a financial setback because of a government shutdown or work furlough, MMI offers free financial counseling 24/7, online and over the phone. Our experts can help you take stock of the situation and provide the best options for repaying debt, rebuilding savings, managing your monthly expenses, and more.
