2013 United States federal government shutdown

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On October 1, 2013, the United States federal government entered a shutdown suspending services not excepted by the Antideficiency Act.[1] Because Congress did not enact regular appropriations or a continuing resolution for the 2014 fiscal year, appropriations have lapsed and about 800,000 federal employees were indefinitely furloughed without pay, while another 1.3 million "excepted" employees were required to report to work for some indefinite period without pay until an appropriations bill is passed or their function is no longer excepted.[2] The most recent of the previous U.S. federal government shutdowns was in 1995–96.[3]

The shutdown resulted from political fights between Democratic President Barack Obama, the Democratic-led Senate with Harry Reid and the Republican-led House of Representatives with John Boehner. The Republicans included separate measures delaying or defunding health insurance programs made by the Patient Protection and Affordable Care Act (commonly known as Obamacare) into the House appropriations bills,[4][5] and the Democrats rejected these measures.[6]

The fight centered on the Continuing Appropriations Resolution, 2014 (H.J.Res 59; 113th Congress) which was passed by the House of Representatives on September 20, 2013.[7] The Senate stripped the bill of the measures related to Obamacare, passed it in revised form on Friday, September 27, 2013.[7] The House put the measures back and passed it again in the early morning hours on Sunday, September 29th.[7] The Senate refused to pass the bill while it still had measures to delay Obamacare, and the two sides couldn't make a compromise bill by midnight on Monday, September 30, 2013, so the federal government shut down, due to a lack of appropriated funds.

The first day of the 2014 federal fiscal year, October 1, 2013, was also when many of the Affordable Care Act's measures took effect.[8] The health insurance exchanges created by the Affordable Care Act launched as scheduled on October 1.[9]

Background

The United States Constitution requires government spending be approved in bills passed by the United States Congress. Some government functions such as the Federal Reserve System are completely self-funded. Others, like Social Security and Medicare are partially self-funded but may be subject to administrative shutdowns and failures of the government to meet its financial obligations. Some programs are fully or partially funded for multiple years and some are funded every year. All funding comes from the Congress expressing its will through law. This is the power of the purse given exclusively to Congress by the United States Constitution.

The legislation that sets government spending is called appropriations legislation. Such bills require approval from a two-thirds majority of the House and Senate in the case of a veto or a simple majority if the President signs or ignores the bill. Since the 1990s, Congress has often failed to pass the twelve to thirteen appropriation bills that set government-wide spending, often passing "Continuing resolutions," to extend existing spending law at or near current levels, and "omnibus" bills that combine many appropriations bills into one. Budget negotiations can be difficult when the president is not of the party that controls one or both houses of Congress. The last budget was passed on April 29, 2009.[10]

If the Congress fails to pass budgetary approval by the end of the fiscal year, a "funding gap" results. The Antideficiency Act requires government functions not excepted by the Act to begin shutting down immediately so that the Constitutional authority of Congress over spending is not breached. The Office of Management and Budget provides agencies with annual instructions on how to prepare for and operate during a funding gap according to the Antideficiency Act.[11] Seventeen federal government shutdowns precede the current one. The first was in 1976, the most recent in December 1995, although only the shutdowns of 1995–96 both involved the whole federal government and were longer than four days.

Preceding events

Having failed to agree by late September on the budget for the fiscal year beginning October 1, members of Congress proposed a resolution to continue funding the government at sequestration levels through December 2013 as a stop-gap measure, to allow more time to negotiate over final funding levels for the full fiscal year.[12]

Republican Senators Ted Cruz, Mike Lee, and others then demanded a delay of or change to the Affordable Care Act in exchange for passing the resolution. Cruz gave a 21-hour speech in the Senate to draw attention to his goals.[13]

On September 30, the Republican-led House sent many proposals to continue funding the government through December while delaying or blocking the Affordable Care Act, each of which were blocked by the Democrat-led Senate.[14] Even if the Senate had agreed to House demands, President Obama threatened to veto any bill that would delay the Affordable Care Act.[15]

Once the shutdown had begun on October 1, a group of 30-40 Republicans in the House continued to pressure House Speaker John Boehner to refuse to allow a vote on any funding resolution that would not block or further delay the Affordable Care Act.[16][17][18]

Much of the Affordable Care Act comes from mandatory spending, rather than discretionary spending, and a continuing resolution would not affect it. Some of the law’s funds also comes from multiple-year and no-year discretionary funds that are not affected by a continuing resolution.[19]

Attempts to correct the shutdown

Although there were reports that enough House Republicans could have allied with House Democrats to pass a "clean" continuing resolution with no funding limits for the Affordable Care Act (17 Republicans and all 200 Democrats were said to be needed to pass the resolution),[20][21][22] House Speaker John Boehner would not allow a vote on such a resolution.[23]

On October 2, the House of Representatives proposed several piecemeal bills to fund national parks and museums, the NIH, and the city of Washington, D.C.[24] After initially failing to reach 2/3 majority needed to suspend the rules, all three passed the House with bipartisan (but predominantly Republican)[25] support,[26][27][28] but Senate leadership and the president rejected these efforts, arguing that they represented an attempt to reduce political pressure on the GOP to resolve the shutdown by funding a few politically-popular agencies while ignoring other important services. The piecemeal bill for the NIH has been criticized as an interference on the interlocking roles and responsibilities of public health agencies.[29]

Effect on federal government operations

USDA website in shutdown on October 1

Office of Management and Budget Director Sylvia M. Burwell, on September 17, 2013, mandated an update for each federal agency's contingency plan which designates excepted agency operations, as needed by the Antideficiency Act for a potential budget-caused shutdown. Burwell stated: "There is enough time for Congress to prevent a lapse in appropriations, and the Administration is willing to work with Congress to enact a short-term continuing resolution to fund critical Government operations and allow Congress the time to complete the full year 2014 appropriations. However, prudent management requires that agencies be prepared for the possibility of a lapse."[30][31][32]

During the shutdown, most "non-excepted" government employees are furloughed. This puts about 800,000 public servants on indefinite unpaid leave starting October 1.[33] The White House estimates that a one-week shutdown could cost the US economy $10 billion.[34] "A shutdown", President Barack Obama stated, "will have a very real economic impact on real people, right away."[35]

Key government functions, such as air traffic control, stay active under emergency funding statutes, though other related functions (such as training and support of these services) are suspended. Some agencies and departments—such as the United States Department of Veterans Affairs and Social Security Administration—are funded by long-term or mandatory appropriations and are also largely unaffected. The United States Postal Service is self-funded and will continue normal operations.[30][36]

American Battle Monuments Commission

The American Battle Monuments Commission operates 24 cemeteries on foreign soil for American servicemen killed overseas. These cemeteries, as well as 26 monuments to American servicemen, will stay closed through the shutdown.[37]

Consumer Product Safety Commission

The Consumer Product Safety Commission won't recall products that might cause injuries but don't pose an imminent danger to safety.[38]

Department of Agriculture

Meat, poultry, and grain inspectors will keep working.[39] However, the U.S. Department of Agriculture will not issue any statistical or economic reports, including those on the prices and supply levels of agricultural goods. These reports are especially important to commodities markets.[40] The Forest Service will close its offices and furlough the vast majority of its staff, with only some law enforcement and firefighting staff staying on duty. Campgrounds and other recreational sites will be closed. The Agricultural Research Service and the Foreign Agricultural Service will shut down.[39]

The Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, may be greatly curtailed. The government will not contribute any new money into the program, which gives food for low-income pregnant women, mothers, and young children. Some states may be able to keep running the program with current money for about a week.[41] The larger Supplemental Nutrition Assistance Program, also called food stamps or EBT cards, is funded by the Recovery Act and will last through 2014.[42]

The National Organic Program, which confirms that food labeled as organic actually meets organic standards, has been suspended as has a program that confirms that imported foods are correctly labeled with their country of origin.[43]

Department of Commerce

The Commerce Department will furlough 40,234 of its 46,420 employees. The United States Patent and Trademark Office will stay open for three to four weeks using funds from the fees it collects.[44] The National Weather Service will keep providing weather forecasts, watches, and warnings normally, as they are critical to protecting lives and property. Some activities related to weather research and developing improvements to the Global Forecast System will cease.[45] The Commerce Department will not release data on the state of the economy.[46]

Department of Defense

Deputy Defense Secretary Ashton B. Carter issued a memo detailing which employees would be furloughed.[47]

On September 28, 2013, Rep. Mike Coffman of Colorado introduced the Pay Our Military Act.[48] The bill would "appropriate funds to pay the military at any time in 2014 when appropriations are not in effect", a situation which would include any potential shutdown.[49] It passed both the House and Senate,[50] and the President signed it into law, recording a video message for members of the military.[51]

Food prices for many military personnel, their families, and retirees are expected to rise due to the closure of the Defense Commissary Agency. This agency runs 178 commissaries, or grocery stores, in the US which offer food at about a 30% discount for military families. The 68 commissaries overseas will stay open.[52]

Furloughs of Defense Department civilian employees have grounded Air Force fighter squadrons. Air Combat Command has grounded squadrons based in the US that aren't set to deploy abroad until after January. This includes the 366th Fighter Wing based out of Mountain Home Air Force Base in Idaho.[53]

The Pentagon has also furloughed civilian specialists who help craft military policy towards the Middle East.[53]

Military Academies

The United States service academies have been affected by the shutdown in various ways. Civilian faculty members have been furloughed, and many classes have been canceled. The library at the United States Air Force Academy has been closed. The libraries at the United States Naval Academy and the United States Military Academy are open, but students can't check out books. The library at the United States Military Academy is currently being staffed by the musicians of the West Point Band. Intercollegiate athletics have been suspended.[54]

Department of Education

The U.S. Department of Education will furlough 3,983 of its 4,225 employees. The government will continue to disburse Pell Grants and other student loans, but the furloughs may cause delays and will limit the department's ability to respond to questions. In its contingency plan for a shutdown, the Department of Education warns that a "protracted delay in Department obligations and payments beyond one week would severely curtail the cash flow to school districts, colleges and universities, and vocational rehabilitation agencies that depend on the Department's funds to support their services".[44][55]

The Department of Education's Office of Civil Rights has suspended investigations into whether certain colleges and universities have mishandled their response to sexual assault on campus as well as investigations into whether colleges have failed to report crimes as required by the Clery Act.[56]

Department of Energy

The U.S. Department of Energy will furlough 9,584 of its 13,814 employees. Those working will continue to work and be paid until reserve funds are exhausted.[57]

Department of Health and Human Services

The Head Start Program, which provides preschool and other services to young children nationwide, did not provide grant money to 23 programs in 11 states. These programs were scheduled to receive funding on October 1. Among the Head Start programs that temporarily closed was one serving 900 children in Prentiss, Mississippi.[58]

Child agences of the HHS were also affected:

Centers for Disease Control and Prevention

The Centers for Disease Control and Prevention will not be able to conduct "in-depth investigations to identify and link outbreaks that may be occurring simultaneously in multiple states" or provide flu surveillance due to the furloughing of 68% of its employees.[59]

Food and Drug Administration

Approximately 45% of the Food and Drug Administration's 14,779 employees will be furloughed. The FDA will stop routine food safety inspections as well as most of its laboratory research. Employees will still handle emergencies and high-risk product recalls.[60]

National Institutes of Health

The National Institutes of Health will cease research conducted at its headquarters in Bethesda, Maryland and will not enroll new patients in medical trials. NIH recently completed one round of grantmaking to outside researchers and applications for the next round are due on October 5. If the shutdown is not prolonged, approval of new grants should not be disrupted. In rare cases, medical researchers who have received grants from NIH may have difficulty accessing funds.[61] The related National Institute of Environmental Health Science will also cease research conducted at its headquarters in Research Triangle Park, North Carolina. On the NIH official website, a warning was posted as a banner headline on all of its pages that read, "Due to the lapse in government funding, the information on this web site may not be up to date, transactions submitted via the web site may not be processed, and the agency may not be able to respond to inquiries until appropriations are enacted."[62][63]

Department of Homeland Security

About 86% of the Department of Homeland Security's 231,000 employees will continue to work during the shutdown. Airport screeners at the Transportation Security Administration will not be affected. 92% of the United States Secret Service, 88% of the United States Coast Guard, 88% of Customs and Border Protection and 78% of the Federal Emergency Management Agency will continue working. 97% of the United States Citizenship and Immigration Services will stay on the job.[64]

The Department of Homeland Security shut down the E-Verify system, which enables employers to check whether the people they hire are eligible to work in the United States. A number of states require employers to use E-Verify for all new employees. For instance, Georgia requires all companies with more than 10 employees to use the system.[65]

The Department of Homeland Security will not accept or investigate civil liberties complaints and will not provide civil liberties training to state, local and federal officials.[43] The Coast Guard will not issue licenses for commercial or recreational boats or their crews.[43] The Federal Law Enforcement Training Center in Glynco, Georgia is closed. The center provides training for about 70,000 state, local, federal and international law enforcement officers every year.[66]

Department of Housing and Urban Development

The Federal Housing Administration will continue to process applications for new home loans. However, the agency will furlough more than 96% of its staff, resulting in delays.[67][68]

Department of the Interior

File:US federal government shutdown notice by Statue Cruise.jpg
US federal government shutdown notice near the Statue of Liberty posted on October 1, 2013 by the ferry operator
The sign for Haleakalā National Park with a Park Closed sign put over it.

All 401 units of the National Park Service will be closed, with only a limited number of law enforcement rangers and firefighters remaining on duty. The United States Park Police will erect barriers around National Monuments in Washington D.C. and across the country. The list of closed sites includes Yosemite National Park, the Statue of Liberty, Ellis Island, Philadelphia's Independence Hall and City Tavern,[69] Alcatraz, and numerous monuments in Washington D.C. including the Washington Monument and the World War II Memorial.[70] The National Park Service will give visitors who are staying overnight in a National Park 48 hours to leave.[71] Furthermore, its Flickr page became inactive.[72]

The Bureau of Land Management will stop processing new permits for oil and gas exploration but will continue to monitor and inspect existing production sites and pipelines. The Bureau of Ocean Energy Management will stop nearly all work on new offshore energy production.[73]

The shutdown has hampered efforts to find a hiker who has been reported missing at Craters of the Moon National Monument and Preserve since September 23. The body of hiker's companion was found previously. The search had been ongoing, but with the start of the shutdown, 16 park staffers were furloughed, hampering the response. The hiker's family has taken to asking for volunteers to continue the search.[74]

Department of Justice

85% of Justice Department employees will stay on the job. Law enforcement officers will stay on the job, but work on civil litigation will stop.[75] For instance, the Justice Department filed a motion requesting to delay the antitrust trial over the American Airlines–US Airways merger.[76] The Justice Department is also seeking to delay a lawsuit brought by the Electronic Frontier Foundation seeking information about government surveillance and a lawsuit brought by the American Civil Liberties Union seeking information on the use of armed drones.[77]

The nation's immigration courts have furloughed about 70% of their employees, including judges. The only cases that will be heard involve individuals who have already been detained. Since the courts were severely backlogged before the shutdown, those whose hearings were delayed might have to wait a year or more for another opportunity.[78]

Department of Labor

The Occupational Safety and Health Administration will stop all workplace safety inspections that do not involve immediate danger or death. Investigations into wage theft and employment discrimination will stop. The Labor Department will continue to pay unemployment insurance and workers' compensation claims.[79]

The Bureau of Labor Statistics will stop conducting research on employment and the economy. The Bureau will stop work on the monthly report on employment. This report, which was scheduled for release on October 4, is widely used by financial markets to assess the state of the US economy.[46] The Labor Department's weekly report on jobless claims will not be affected.[46]

Of the Labor Department's 16,304 employees, 82% will be furloughed, while 2,954 will stay on the job.[79]

Department of State

The U.S. Department of State will continue to process visa and passport applications, using funds from fees. Consular services will also continue. The department's Office of the Inspector General will shut down. The State Department has also instituted a hiring freeze and delayed the start dates of applicants who received job offers.[80]

Department of Transportation

The National Highway Traffic Safety Administration will not issue any new automotive recalls. Consumers will be able to file car safety complaints but these complaints will not be acted on. The agency has suspended field investigations of automotive crashes. NHTSA did not send personnel to investigate a battery fire that destroyed a Tesla Model S electric car in Kent, Washington.[81] The agency furloughed 333 of its 597 employees.[82]

The United States Merchant Marine Academy suspended classes. The United States Maritime Administration, which runs the academy, furloughed 451 of its 830 employees.[83]

The Federal Aviation Administration will furlough 15,500 of its 46,000 employees. Air traffic controllers will continue to work, but about 3,000 airline safety inspectors will be furloughed. Work on the Next Generation Air Transportation System will cease as will training for air traffic controllers and aviation policymaking.[84][85]

Department of the Treasury

The shutdown will undermine efforts by the United States to prevent money laundering and to enforce economic sanctions on Iran, North Korea and other countries. The Treasury Department has furloughed 90% of the staff of the Office of Terrorism and Financial Intelligence and 91% of the Financial Crimes Enforcement Network. These agencies handle reports of suspicious activity from banks and financial institutions and implement sanctions.[86]

The shutdown will delay the release of new alcoholic beverages. The Treasury Department Alcohol and Tobacco Tax and Trade Bureau will not approve labels for alcoholic products and will not approve permits for distilleries, wineries, and breweries.[87]

Department of Veterans Affairs

Medical services provided by the Department of Veterans Affairs will be unaffected by the shutdown. Veterans have already received pension, disability, and GI Bill payments for the month of October. If the shutdown lasts for more than two or three weeks, the VA may not be able to pay benefits for the month of November. The VA will continue to work on disability claims that were filed before the shutdown, but veterans may experience delays. New disability claims will not be processed during the shutdown and all appeals of disability claims will be suspended.[88] The VA will furlough 14,224 of its 332,025 employees.[44]

Environmental Protection Agency

The Environmental Protection Agency will furlough over 93% of its 16,205 employees. The Agency will almost entirely cease issuing licenses and permits, which may cause delays for companies seeking to build or expand facilities. The agency will stop working on new policies in areas such as air pollution and renewable fuels.[89]

Federal Communications Commission

The Federal Communications Commission will furlough about 98% of its 1,754 employees. The FCC will stop working on its approvals of mergers in the broadcast television industry. Among the deals that will be delayed are the $1.5 billion purchase of Belo by the Gannett Company, the $2.7 billion purchase of Local TV by the Tribune Company and the $985 million purchase of Allbritton Communications Company by the Sinclair Broadcast Group.[90]

The FCC will suspend work on the testing and approval of new wireless products, such as cell phones. A prolonged government shutdown may delay the release of new products.[91]

General Services Administration

The General Services Administration will furlough a large part of its 11,821 employees while maintaining an active workforce of about 4,094 to continue maintenance of federal property and to continue ongoing construction projects through the Public Buildings Service. Employees of the Federal Acquisition Service will not be immediately furloughed but may be subject to a phased shutdown that could take 25 business days.[92]

Intelligence agencies

Intelligence agencies will continue to operate but 70% of the civilian workforce will be furloughed. Reuters reported that the Central Intelligence Agency will furlough approximately 12,500 employees. There will be less of an impact at the Defense Intelligence Agency and the National Security Agency, as a large percentage of the workforce of these agencies are uniformed members of the military. However, NSA Director Keith B. Alexander said that the agency had furloughed "over 960 Ph.D.s, over 4,000 computer scientists, [and] over a thousand mathematicians."[53] A spokesman for the Director of National Intelligence said: "The Intelligence Community's ability to identify threats and provide information for a broad set of national security decisions will be diminished for the duration. The immediate and significant reduction in employees on the job means that we will assume greater risk and our ability to support emerging intelligence requirements will be curtailed. The fraction of Intelligence Community employees who remain on the job will be stretched to the limit and forced to focus only on the most critical security needs."[93] If the shutdown lasts for more than a few weeks intelligence operations could also be affected by delays in awarding new contracts or paying existing contractors.[80]

The Privacy and Civil Liberties Oversight Board postponed hearings on NSA surveillance that were scheduled for October 4.[53]

Internal Revenue Service

The Internal Revenue Service will not provide assistance to taxpayers during the shutdown. Tax refunds are likely to be delayed, but taxpayers with an extension of their 2012 income tax return will still be required to submit the return by October 15. The IRS will suspend audits of taxpayers during the shutdown; however, IRS criminal investigations will continue at nearly normal levels. 90% of IRS employees will be furloughed.[94]

The IRS stopped issuing forms that are used to verify the income of mortgage applicants. These forms are often required by banks in order to close a mortgage. Because these forms are typically requested weeks before closing, the mortgage market is unlikely to experience a significant impact if the shutdown is of a brief duration. However, a shutdown that lasts beyond 1–2 weeks may cause a disruption.[95]

Library of Congress

Shutdown message at LoC website on October 1

The Library of Congress has shut down. The National Library Service for the Blind and Physically Handicapped will cease operations and all Library of Congress websites except for two sources of legislative information, THOMAS and congress.gov, will remain inaccessible.[96]

National Aeronautics and Space Administration

NASA will furlough 98% of its staff, leaving fewer than 600 out of more than 18,000 employees on the job. NASA will continue to support the astronauts on the International Space Station and the agency will maintain spacecraft that have already launched. However, work with unmanned spacecraft will be minimal. The Hubble Space Telescope, Curiosity and Opportunity Mars rovers will continue to operate, but analysis of the data it collects will cease. Work on any spacecraft that have not yet launched will stop.[97][98][99] The NASA.gov website, NASA TV, the organization's cable and IPTV network, were replaced by messages referring to the shutdown.[100] NASA's LADEE mission will be in the critical phase of entering the Moon's orbit and so a few crews will be working on maintaining the spacecraft. No experiments will be conducted, however.[101]

An extended shutdown initially threatened to force a 26-month postponement of NASA's MAVEN mission to Mars. The spacecraft is scheduled to launch on November 18. If it does not launch by December 7 Mars will move too far out of alignment with the Earth. The next launch window will not occur until 2016. Bruce Jakosky, who is directing the mission, said that a 2016 launch would be less useful scientifically because the timing would correspond with a low point in the solar cycle.[102] On October 3, Jakosky reported that NASA had deemed a 2013 MAVEN launch essential to ensuring future communication with current NASA assets on Mars--namely the Opportunity and Curiosity rovers--and that spacecraft processing had already been restarted in preparation for an on-time launch.[103]

National Archives

The National Archives and Records Administration (NARA) will shut down all its archival facilities and the NARA-operated parts of Presidential Libraries. The NARA Federal Records Centers will remain open. Most NARA employees will be furloughed.[104]

National Labor Relations Board

The shutdown of the National Labor Relations Board, which furloughed all but 11 of its 1,600 employees, has led to delays in the process that handles disputes between labor and management. In New York City, a trial involving Cablevision and its employees has been delayed. The agency also oversees elections where workers vote on whether or not to unionize. These elections will be delayed for the duration of the shutdown. In one case, adjunct professors at Bentley University in Massachusetts held a vote over whether to unionize, but these votes may not be counted until after the shutdown ends.[105]

National Science Foundation

The National Science Foundation will not make payments to scientists during the shutdown. The NSF will not accept reports from grantees and will not respond to inquiries.[106]

National Transportation Safety Board

The shutdown has reduced the ability of the National Transportation Safety Board to investigate aviation accidents. After the fatal crash of a Cessna Citation in Santa Monica, California, investigators collected perishable evidence from the scene but were then sent home.[107]

Small Business Administration

The Small Business Administration will stop processing new loans to small businesses with the exception of loans to businesses affected by natural disasters. Existing loans will be unaffected. Programs that help mentor business owners, including businesses owned by veterans, will be shut down. About 62% of SBA employees will be furloughed.[108]

Smithsonian Institution

The Smithsonian Institution will shut down. Among the attractions that will be closed are the National Museum of Natural History, the National Air and Space Museum, and the National Zoological Park. Skeleton crews will be on site to provide security and to feed and care for the animals.[109]

Social Security

The Social Security field offices would offer limited services, including hearings offices before an Administrative Law Judge (ALJ), though the card centers were closed. Beneficiaries of payment would continue to receive their dues. Online services would also continue, while the agency had a contingency plan.[110]

The White House

President Obama curtailed a planned foreign trip to Asia, canceling stops in Malaysia and the Philippines. The cancellation undermines the East Asian foreign policy of the Barack Obama administration and may delay trade deals with Southeast Asian countries.[111]

Other

The United States Holocaust Memorial Museum will shut down[109] as well as the United States Institute of Peace, a government think-tank.[80] Another research institute, the Woodrow Wilson International Center for Scholars, will continue operating with reduced staffing.[80] Some parts of the Broadcasting Board of Governors have had to shut down due to a lapse in appropriations for the U.S. federal government, but BBG-supported media are still bringing news and information programs to audiences around the world. U.S. international media activities under the BBG that are deemed “foreign relations essential to national security,” such as news programming and distribution, are excepted from the shutdown and will continue.[112]

Effects on non-profit organizations

The 2013 ArtPrize in Michigan was affected by the shutdown due to several entries being displayed in and around the Gerald R. Ford Presidential Museum, part of the National Archives, which was affected of the shutdown.[113][114]

Effect on businesses

Defense contractors and some manufacturers the government are experiencing disruptions as the shutdown has prevented these companies from delivering goods and receiving payments for work already done.[115] United Technologies announced that if the shutdown is not resolved by October 7, it will furlough 2,000 employees at a subsidiary, Sikorsky Aircraft. The company makes helicopters for the military. Another 2,000 United Technologies employees will be furloughed if the shutdown lasts beyond October 14 and an additional 1,000 if the shutdown lasts into November. Another United Technologies subsidiary, Pratt & Whitney, a manufacturer of aircraft engines, is also affected. The Sikorsky and Pratt & Whitney factories require civilian employees from the Defense Contract Management Agency to approve their products before they can be delivered to the government. These Defense Department employees have been furloughed.[116]

Small businesses are facing delays in receiving loans from the Small Business Administration. Many of these companies may need to turn to alternative funding sources that charge much higher interest rates. One alternative source of credit, merchant cash advances, charge interest rates of between 40% and 100%.[117]

Airbus was unable to deliver a new A321 to the airline JetBlue because Federal Aviation Administration personnel who certify airplanes were furloughed.[118]

Effect on Native Americans

The shutdown has interrupted federal funding to Indian tribes, including programs that involve health, nutrition and foster care. Some tribes have been able to temporarily continue funding programs themselves but others have had to immediately suspend programs. The Crow Tribe of Montana furloughed 316 employees and suspended programs providing health care, bus services and improvements to irrigation.[119]

Effect on the District of Columbia

The local budget of Washington, D.C. is set by the elected District government but must be approved by Congress. As a result, local government functions, such as neighborhood trash collection and motor vehicle services, can be affected by a federal government shutdown. In past lapses in Congressional appropriations, the city has shut down government services in a manner similar to the federal agencies. However, during the current shut down, the District government has remained operational using reserve funds already approved by Congress. If a shutdown continues, that fund will be exhausted on or about October 13. As a contingency, the Mayor of the District of Columbia informed the Obama administration that all local government personnel are excepted, meaning that they would continue to work even if the District government exhausts its reserve funds. As of October 1, the Office of Management and Budget has yet to respond.[120]

The District of Columbia has suspended payments to healthcare providers and managed care organizations that provide services to the city's 220,000 low-income and disabled residents who qualify for Medicaid. The District's contingency funds, which are being used to keep other city services open during the shutdown, are not sufficient to pay the $89.2 million owed to insurers and the $23 million a week owed to healthcare providers.[121]

A bill introduced by Republican Darrell Issa of California and passed by the House Oversight and Government Reform Committee would allow the District to spend its own local revenues independent of Congress. If the measure becomes law, it would prevent the District government from shutting down in the event of a lapse in federal appropriations.[122]

The District of Columbia Superior Court, which is operated by the federal government, remains largely open during a shutdown but will delay payments to witnesses, jurors, court-appointed lawyers, language interpreters and others until after appropriations are restored.[123]

Economic impact

Moody's Analytics estimated that a shutdown of three to four weeks would cost the economy about $55 billion. Lost wages of Federal employees will amount to about $1 billion a week.[124] Goldman Sachs estimated that a three-week shutdown would reduce the Gross Domestic Product of the United States by 0.9%.[125] According to the Los Angeles Times, a two-week shutdown would reduce GDP growth in the fourth quarter by 0.3 to 0.4 percentage points. By comparison, the GDP has grown by less than 2% in 2013.[126]

The economic impact of the shutdown will be particularly severe in the Washington D.C. metropolitan area. Approximately 700,000 D.C. area jobs could be affected at a cost of $200 million a day.[127] The State of Maryland predicted that it would lose approximately $5 million a day in tax revenue.[128]

Local communities across the country are also seeing a significant economic impact, particularly those communities that are heavily dependent on the Federal government. For instance, during the month of October, tourists spend about $2.7 million a day at the Grand Canyon National Park and other National Parks in Arizona.[129] Xanterra Parks and Resorts, a concessioner which operates hotels, restaurants and other visitor services in 21 national parks, has reported that it is losing $1 million in revenue each day because the parks have closed.[130] Several owners of tourist-oriented businesses located near national parks told NBC News that they were experiencing cancellations and declines in traffic that threatened their livelihoods. Julie Fox, a cafe owner in Moab, Utah (outside Arches National Park) said "Twenty percent of my yearly income comes from October and May. If it's anything like last time – 21 days – I'll lay off eight out of twelve people. It'll be like the dead of winter here."[131]

Analysts are concerned that the political gridlock will extend into mid-October, when Congress and the President must agree to raise the debt ceiling to avoid the prospect of defaulting on the public debt. Following the debate over the debt ceiling in May 2013, the Treasury Department was forced to engage in extraordinary measures to fund the government. In August 2013, the Treasury informed Congress that the extraordinary measures would be insufficient starting in mid-October and further specified, in late September, that the U.S. would begin to default on its debts if a new debt ceiling was not approved by October 17.[132][133] On 2 October, President Obama explicitly linked the government shutdown to the debt ceiling issue, stating that he would not reopen budget talks until Republicans pass a bill raising the debt limit.[134]

Reactions

Domestic political

President Barack Obama said he would not cave in to "ideological" demands.[135] He blamed Republicans for the shutdown.[136] He also said of the Republicans in the house: "One faction, of one party, in one house of Congress, in one branch of government, shut down major parts of the government -- all because they didn’t like one law."[137] On October 2, Obama explicitly linked the government shutdown to the debt ceiling issue, stating that he would not reopen budget talks until Republicans pass a bill raising the debt limit.[134] House minority leader Nancy Pelosi referred to the event as the "Tea Party Shutdown".[138] Senate minority leader Mitch McConnell called the shutdown the prize of the Democratic leaders in Congress.[139]

Economy

U.S. financial markets rose the next day as investors weighed the effects of the shutdown.[140] However, in the U.K. markets fell.[141]

Individuals

A group of 80 World War II veterans participating in an Honor Flight trip from Mississippi to the National World War II Memorial ignored the closure by the National Park Service and entered the memorial.[142]

Public opinion

On the eve of the shutdown, a CNN/ORC poll found that 46% of the country would primarily fault congressional Republicans, 36% of the country would fault Obama, and 13% would fault both equally in the event of a shutdown.[143] General sentiment was against the shutdown, with approximately 6 out of 10 respondents desiring a budget agreement and only 1 out of 3 respondents believing it to be more important to block the implementation of the Affordable Care Act by cutting government funding.[144] Likewise, the predominant attitude towards Congress as a whole was one of strong dissatisfaction as surveyed in the Washington Post-ABC poll released on September 30. While congressional Republicans fared worst in the public eye as compared to Obama or their Democratic colleagues, both parties suffered higher disapproval than approval ratings for their handling of budget negotiations: Democrats by a margin of 34% in approval to 56% in disapproval and Republicans by a margin of 26% approving to 63% disapproving.[145]

Tourists

The closure of the Statue of Liberty and Ellis Island caused frustration to many tourists especially for those who were from outside of the United States. Signs near the entrance of the Statue of Liberty ferry posted on October 1 to inform tourists of the closure and provide information on another option of sightseeing tour by ferry.[146] The ferry operator also had staff to turn away many would-be visitors who were disappointed and angry with the decision to close the monument.[147][148]

U.S. media

Media coverage of the government shutdown has been the subject of criticism from both sides of the political spectrum. Media Matters for America has asserted that major media outlets have presented a "false equivalence" in their coverage of the shutdown. According to the group, media such as CNN, Fox News Channel and the Wall Street Journal have blamed both Democrats and Republicans for the impasse, when, the organization claims, public polls and congressional experts both hold the GOP largely responsible.[149] Media Research Center has asserted that broadcast networks ABC, NBC, and CBS have covered the shutdown with a bias against the Republican Party. According to the MRC, those networks "spent the two weeks prior to the shutdown almost universally pinning the blame on congressional Republicans, especially conservative/Tea Party House Republicans." The report also found that the three networks ran 39 stories about the possibility of a shutdown; of those, 21 blamed Republicans, none blamed Democrats, and four placed equal blame.[150] Meanwhile, Fox News was noted to feature criticism of Obama and minimization of the impact of the shutdown, while also acknowledging the political damage from the House GOP’s shutdown strategy.[151][152]

International Reactions

U.K Prime Minister, David Cameron, stated the USA shutdown should serve as a reminder on how public expenditure should be prudently controlled, otherwise a deficit is inevitable. The statement came to reinforce the unpopular austerity measures and promote them as being necessary.[153]. And he indicated in an interview with BBC's Radio 4 , that the U.S inability to finalize its spending plan will impose a huge risk on the global economy[154]

See also

References

This article incorporates public domain text from the BBG.gov website as indicated

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