A Shutdown Primer: What Happens When the Government Stops Working?

The U.S. Constitution requires Congress to pass a bill establishing a federal budget, often called a spending bill. For a spending bill to pass, the Senate and the House of Representatives must agree on the bill, which must then be approved by the President. When Congress is unable to agree on a federal budget before the budget cycle ends—or when the President vetoes it—a government shutdown occurs.

Because Congress could not reach agreement on a spending bill last week, a government shutdown began on Tuesday, Oct. 1. The Republican-controlled House of Representatives did pass a spending bill that maintains spending levels, but the bill did not provide funding to implement the Affordable Care Act and the Democratic-controlled Senate has refused to take up any bill that does not fully fund the ACA.

What happens during a government shutdown?

 Similar to a lockout in the private sector, during a government shutdown the government stops providing all “non-essential” services. This means that many government functions stop, and many federal employees are furloughed. (Military personnel and essential employees are not be furloughed, however.)

In addition, other “essential” government functions and services continue. These functions and services include:

  • Social Security, Medicare, and certain types of veterans’ benefits;
  • National security, including the U.S. military and embassies;
  • Public safety, including air traffic control, emergency medical care, border patrol, federal prisons, most law enforcement, emergency and disaster assistance, overseeing the banking system, operating the power grid, and guarding federal property;
  • All agencies with independent sources of funding, including the U.S. Postal Service and the Federal Reserve; and
  • Members of Congress, including essential Congressional staffers (but not those that are non-essential).

Nearly all federal agencies are affected by the government shutdown in some way (the Office of Management and Budget has detailed contingency plans that describe each agency’s course of action), including the furlough of roughly 800,000 federal workers:

  • Department of Health and Human Services: HHS said that a government shutdown could mean furloughing 40,512 workers, or about 52 percent of HHS employees. However, the effect that the shutdown has on each office varies based on whether the service is essential. For example, those running the Suicide Prevention Lifeline would stay, but those in charge of investigating Medicare fraud would be furloughed. In addition, some parts of HHS will only be partially shut down.
  • Department of Labor: About 13,350 employees have been furloughed, amounting to 82 percent of the DOL’s workforce.
  • Internal Revenue Service: Nearly 90 percent of the IRS’ workforce, or 86,200 workers, have been furloughed. Although Social Security benefit payments, automated revenue collections and daily cash management for the federal government will continue, the IRS will stop performing key functions, including audits, examinations of returns, processing of paper returns and call-center operations for taxpayers with questions. Certain essential employees, such as law enforcement, will not be furloughed, along with some positions that are paid for by funds outside of Congressional appropriations.

How does the government shutdown impact the ACA? The government shutdown has very little, if any, impact on the health care reform law, despite efforts to defund the law. Because funding for the ACA was passed by Congress in 2010, the health insurance exchanges still opened for enrollment on Oct. 1, and won’t be affected by the government shutdown.

Although the exchanges are operational, technical difficulties have occurred because of high volume of traffic. When attempting to access Exchange websites on Oct. 1, consumers experienced wait times, glitches and error messages indicating heavy Internet traffic.

IT contractors worked to fix the issues. However, the shutdown affects non-essential government workers—which may include some of the IT staff.

This article is reprinted with permission from a Health Care Reform Bulletin published by Brown & Brown Insurance, which— through The Trust—offers competitive benefits packages featuring options from numerous insurers to Northwest financial institutions.

 

Strategic Link is the NWCUA’s wholly-owned service corporation, using the power of aggregation to provide the Association’s member credit unions with exclusive high-quality, competitively-priced products and discounted services. Contact Director of Strategic Partnerships Craig Reed today to find out how Strategic Link can help your credit union save money while meeting its goals in 2013 and beyond: creed@nwcua.org.

 

Posted in Federal.