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Govt shutdown threatens 800k, worries Obama

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Bloomberg Washington

In the event of a government shutdown, the National Institutes of Health won’t admit new patients, some taxpayers will wait longer for refunds and any furloughed civil servants with federally issued BlackBerrys must turn them off.

A failure by Congress to extend the government’s spending authority, which expires tomorrow, would force the closure of national parks, monuments and museums. Federal agencies - such as the National Labor Relations Board - that don’t protect lives, property or national security also would be shuttered.

As Democratic and Republican leaders in Congress seek agreement on a spending measure for the rest of the 2011 fiscal year, the Obama administration has warned of economic disruption from even a short shutdown. More than 800,000 “non-essential” federal workers - out of a civilian workforce of 2.1 million - would be furloughed until new spending legislation was passed. Agencies have drafted contingency plans for who would work and who wouldn’t.

 

The prospect of a government shutdown, however limited it may be, has placed pressure on the Obama administration and congressional leaders to settle their dispute over $30 billion or more in cuts from the federal budget through September before a suspension - as of midnight tomorrow - of all but essential federal services. Leaders of both parties are bracing for the blame that will be attached to their failure to resolve what the White House has described as minimal differences.

“People are going to have to understand that a shutdown would have real effects on everyday Americans,” President Barack Obama said last night after a meeting with congressional leaders at the White House, where he expressed confidence that a shutdown can be averted.

Elected officials, including members of Congress and the president, would get paid during a shutdown unless Congress changes the law. Unlike the president and legislators, though, military personnel and federal employees who are deemed “essential” would receive no paychecks.

Although troops and the civilian employees who continue to work would get paid for their service after government financing is restored, there is no guarantee that Congress would make furloughed workers whole.

“You should plan accordingly,” says a sample letter to non-essential employees prepared by the House Administration Committee that also advises furloughed workers not to log on to government e-mail and to turn off their government-issued BlackBerrys.

The cost of back pay for furloughed government workers would be $174 million for each day the government is closed, according to data compiled by Bloomberg Government analyst Scott Anchin.

The US military’s operations in Afghanistan, Iraq and Libya would continue under the Feed and Forage Act, which guarantees payment of its expenses. The 1861 law “was designed for the cavalry troop that was going through Dodge City and needed to get ammunition for its rifles and food for men and horses,” said John F Cooney, a former government budget official. It’s “a standing promise” by Congress to “fund any bill troops run up” to defend themselves, he said.

Medicare and Social Security would continue to pay benefits to elderly Americans because they don’t depend on year-to-year spending measures from Congress, said Cooney, who was deputy general counsel of the Office of Management and Budget under President Ronald Reagan.

The Social Security Administration plans to continue sending checks during a shutdown and accept new applications for benefits, said spokesman Mark Hinkle.

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First Published: Apr 08 2011 | 12:15 AM IST

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