Here's How The Government Shutdown Gets Worse Over Time

Business Insider

View photo

.
government shutdown jefferson memorial

REUTERS/Kevin Lamarque

The Jefferson Memorial is seen with its entry closed off in Washington, October 1, 2013.

About 800,000 federal workers have been furloughed and aren't accruing pay. Hundreds of thousands more are working because they're "essential." They're on the job and accruing income, but the federal government cannot issue payments for that work until the government shutdown is over.

All these workers losing pay is a problem, both for their families and the broader economy. But it doesn't become a really big problem until mid-October, when most federal workers are next scheduled to be paid.

Most federal workers' next paychecks are due on Oct. 11 or Oct. 15, depending which of four major federal payroll processing centers serve them. So, if the shutdown is resolved by then, essential workers won't miss any pay. Furloughed workers will also be paid in full if Congress agrees to make them whole, as it has done in past shutdowns.

Active-duty military service members and workers whose pay is not subject to congressional appropriation (such as postal workers) will be paid as usual, even if the government shutdown is not fixed.

And the mid-October check is for work during a two-week period ending Oct. 4. Even if the government is still closed on Oct. 11 or Oct. 15, federal workers will get a partial paycheck, because 6 of 10 business days in the Oct. 4 pay period were in September.  Guidance  from the Office of Personnel Management makes clear that processing payroll for periods prior to shutdown is one of the exempted activities that is permissible during shutdown.

That doesn't mean the shutdown doesn't matter yet, from an employee perspective or an economic one. Many federal workers are surely slowing down their spending in anticipation that they might miss a paycheck.

But the effects will get a lot bigger if payments are actually missed—and even bigger if the shutdown remains ongoing at the end of October, when many employees would miss a full paycheck. This is why I'm skeptical of claims that a government shutdown "could last weeks"; members of Congress will be seeing much more acute economic effects in their neighborhood (Washington) at the end of the month than they are today.

This is just one example among many of a problem that builds over time as the government stays shut down. For example, unlike most nutrition assistance spending, the state-federal Women, Infants and Children program (WIC) is subject to appropriation and the government shutdown cuts off its federal funding. But states have flexibility to tap contingency funds and money left over from 2013 to pay for beneficiaries' food and infant formula—for a period of days or weeks, at least.

A lot more problems can be papered over in a short shutdown than a long one. As time passes and the government stays shut, more of those problems assert themselves, and continuing the shutdown becomes less and less tenable.



More From Business Insider

Rates

View Comments (47)