Friday, February 18, 2011

If Government Shutdown Occurs, Prepare For Much Collateral Damage

by Frank James

Image: Susan Walsh/AP: A worker at the John F. Kennedy Library and Museum in Boston leaves after being ordered out due to a 1995 government shutdown.

Politico reported
Friday morning that a top aide to Minority Leader Rep. Nancy Pelosi told colleagues at a meeting that a government shutdown is more likely than not, which kicked off a discussion about preparations.

To which anyone old enough to recall the last government shutdown in 1995 can only say: holy cow!

If war is the failure of diplomacy, a shutdown is the failure of legislating. Both cause much collateral damage that tends to quickly get the attention of a public that probably cared a lot less when all the talk of a pending crisis was theoretical.

In 1995, for instance, it wasn't just government workers who took big hits, but tens of thousands of businesses somehow reliant on the government whether they knew it or not. And there were millions of Americans and foreigners as well who depend on government services like the provision of passports and visas.

An important difference between now and then is that the economy was growing more strongly in terms of employment. If a shutdown happens now, it would be at a time when the economy is much less robust than it more tentative.

A September 2010 Congressional Research Service report on the effects of the 1995 shutdown reported the following:

• Health. New patients were not accepted into clinical research at the National Institutes of Health (NIH) clinical center; the Centers for Disease Control and Prevention ceased disease surveillance; hotline calls to NIH concerning diseases were not answered; and toxic waste clean-up work at 609 sites reportedly stopped and resulted in 2,400 Superfund workers being sent home.

• Law Enforcement and Public Safety. Delays occurred in the processing of alcohol, tobacco, firearms, and explosives applications by the Bureau of Alcohol,Tobacco, and Firearms; work on more than 3,500 bankruptcy cases reportedly was suspended; cancellation of the recruitment and testing of federal law enforcement officials reportedly occurred, including the hiring of 400 border patrol agents; and delinquent child-support cases were delayed.

• Parks, Museums, and Monuments. Closure of 368 National Park Service sites (loss of 7 million visitors) reportedly occurred, with loss of tourism revenues to local communities; and closure of national museums and monuments (reportedly with an estimated loss of 2 million visitors) occurred.

• Visas and Passports. Approximately 20,000-30,000 applications by foreigners for visas reportedly went unprocessed each day; 200,000 U.S. applications for passports reportedly went unprocessed; and U.S. tourist industries and airlines reportedly sustained millions of dollars in losses.

• American Veterans. Multiple services were curtailed, ranging from health and welfare to finance and travel.

• Federal Contractors. Of $18 billion in Washington, D.C., area contracts, $3.7billion (over 20%) reportedly were affected adversely by the funding lapse; the National Institute of Standards and Technology (NIST) was unable to issue a new standard for lights and lamps that was scheduled to be effective January 1, 1996,possibly resulting in delayed product delivery and lost sales; and employees of federal contractors reportedly were furloughed without pay.

In a January 19, 1999, Senate floor speech found on page S534 of the Congressional Record, Sen. John McCain (R-AZ) described some of the effects of the shutdown thusly:

In my State of Arizona, during the Government shutdown the Grand Canyon was closed for the first time in 76 years. I heard from people who worked close to the Grand Canyon. These were not Government employees. These were independent small business men and women.

They told me that the shutdown cost them thousands of dollars because people could not go to the park. According to a CRS report, local communities near national parks alone lost an estimated $14.2 million per day in tourism revenues as a direct result of the Government shutdown, for a total of nearly $400 million over the course of the shutdown. The cost of the last Government shutdown cannot be measured in just dollars and cents...

Ed O'Keefe, who writes the Federal Eye blog for The Washington Post also explains what would likely happen in a federal shutdown, circa 2011. For Washington, which is a company town after all, a government shutdown would be especially painful.

The bottom line is a lot of economic pain at a time when a lot of people are already hurting.

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