As the clock ticks down to a possible federal government shutdown at midnight tonight, other $28 billion departments or agencies—like Health and Human Services and Transportation—are gearing up for groundbreaking disruptions. The Education Department announced plans to furlough almost 1,500 of its 1,700 staff. Federal student aid workers won’t be going home on indefinite furloughs. This pandemic-related furlough is part of a broader wave during the Trump administration to downsize the federal workforce. Unsurprisingly, many are worried about the potential cuts it portends to services and its overall effect on our economy.
To their credit, the Department of Government Efficiency and other elements of the Republican Gov. Unfortunately, their intentions could end up amplifying the harm of a shutdown. Some critical services will persist, such as burials at VA national cemeteries. Hundreds of thousands of workers in every industry will experience economic instability and likely lose at least one paycheck or more during the shutdown.
The National Park Service has provided guidance on how they will address efforts to limit access to parks during this ongoing crisis. According to their guidelines, “Generally, where parks have accessible park areas, including park roads, lookouts, trails, campgrounds, and open-air memorials, these areas will remain physically accessible to the public.” Facilities not accessible after business hours will be closed. This will continue until the funding lapse ends.
Should a governmentwide shutdown occur, economic analysts predict it could reduce growth by approximately 0.15 percentage points for each week it lasts. The broader implications for the private sector are even more profound. The negative impact may increase at a rate of about 0.2 percentage points per week. A rebound much stronger than 1% is likely in the quarter immediately after reopening. At that pace, this rebound will equal the previous cumulative loss by this fall.
As reiterated by Phillip Swagel, director of the Congressional Budget Office, the economic impact of these shutdowns is reflected with a lag. He stated, “The impact is not immediate, but over time, there is a negative impact of a shutdown on the economy.” He added that long-term closures could cause confusion over what the federal government should do and what it means financially for appropriated programs.
Despite all this positive momentum, Congress is still deadlocked. The House is in recess this week and won’t be voting on anything. That’s a troubling sign of continued distance from any sort of compromise. House Republicans have released a new short-term continuing resolution to fund the government until November 21. At the same time, Democrats are requiring that this The BIG Plan address their health care issues.
During the entirety of Trump’s first term, there was a 35-day partial shutdown. As a consequence, 340,000 of the 800,000 federal workers at those four agencies were sent home on furlough. The former administration moved quickly to get the impacts of the shutdown under control. Shortly after the shutdown began, Congress passed legislation mandating that furloughed workers receive retroactive pay as soon as the government reopened.
Nevertheless, the Trump administration has considered issuing reduction-in-force notices for programs that lack alternative funding sources as part of its ongoing strategy to manage government operations. A reduction in force would cost non-probationary federal employees their jobs and would make the elimination of these positions within federal agencies permanent.
