Government Shutdown

[TimeToDie 39]

As the clock ticks down to a looming government shutdown, many analysts fear a rapid decrease in consumer confidence and spending could derail the fragile economic recovery.

If lawmakers can't agree on a budget measure before the current continuing resolution expires just after midnight Saturday, federal departments and agencies will be required by law to shut down.

Passage of an appropriations bill or an extension on negotiations would effectively forestall a shutdown, but the budget talks between Republicans and Democrats seem far from resolution.

If the government is shuttered, federal departments and agencies will have to comply with contingency plans set forth by the Antideficiency Act of 1870 and therefore would have to cease all operations.

Hundreds of thousands of federal employees would be told to stop working, the economic effects of a shutdown would reverberate throughout the nation, and the longer it lasts, the more dire the financial repercussions, Gus Faucher, the director of macroeconomics at Moody's Analytics, told TheStreet.

"If it starts stretching to two to three weeks, there is a potential for a negative impact on the economy, particularly through confidence," Faucher said. "If people feel that the government can't really handle this and can't get their house in order, then we could see consumers get a little bit anxious."

Many federal employees wouldn't be allowed to work, not even as unpaid volunteers for the government, and would be placed in a temporary nonpay status.

Only "excepted" employees would be exempt from the furlough, such as emergency workers, security personnel and air traffic controllers. But even the employees who are considered essential would not get paid until after the shutdown, which could very well cause a decline in spending, Faucher said.

"We estimate that will hit take-home pay by about $2 billion per week. There's the potential there for cutbacks in spending because of that," Faucher said. "Federal employees who aren't getting paid could start getting nervous, and they could cut back on spending as well."

The financial impact on federal workers remains uncertain, a federal employee told TheStreet on condition of anonymity, as many of them don't know when or whether they will receive their next paycheck.

"It's kind of scary," the federal employee said. "I think it's really going to hit home for a lot of federal employees. We could be facing this type of issue permanently, depending on what type of budget is passed."

The worker admitted to delaying buying a new Apple iPad 2 because of the uncertainty surrounding the potential shutdown.

"As a consumer, that's something I am going to put off buying, because I am not sure what's going to happen," the employee said. "And a lot of people have much more important things to worry about and are facing much tougher circumstances. We don't know if we will get paid at all."

The most recent government shutdowns occurred between late 1995 and early 1996, when Democratic President Bill Clinton and the Republican-controlled House and Senate were caught in a budget dispute.

After the first six-day shutdown in November 1995, the Clinton administration estimated that the idled federal government had cost taxpayers about $800 million, including $400 million in wages to federal workers who weren't allowed to work, and another $400 million in lost revenue in the days that the Internal Revenue Service enforcement divisions were shut down.

The IRS would continue electronic tax-return processing this time, but paper returns, tax audits and refund checks would be suspended.

Maureen Gilman, the political director for the National Treasury Employees Union, said a shutdown would likely delay refund checks, The Wall Street Journal reported, because any work force disruption at the peak of tax season could slow processing times.

About a third of taxpayers file their returns between early April and tax day (this year it's April 18), which is 29.2 million tax returns, accounting for tens of billions of dollars in refunds, TaxMasters CEO Patrick Cox told TheStreet.

While only 30% of tax returns are expected to be filed by paper, all the refunds for those filings could be delayed by a few months, Cox said, which could have a "significant effect on the economy."

Most taxpayers don't put their refunds into their savings accounts, according to Cox. Instead, they plan to spend it.

"We're looking at a large number of people that planned to spend that money," Cox said. "If it doesn't show up, they won't have that money to spend. That's bound to have a significant effect on the economy."

The Federal Housing Administration would stop guaranteeing loans, spoiling time-sensitive mortgage deals, which could quickly upset the recovering housing market, while the Small Business Administration would also have to stop processing loan applications.

"Independent economists are out there making clear what the impact on the economy would be on the uncertainty it would create for businesses," White House Press Secretary Jay Carney said in a briefing earlier this week. "That would obviously be harmful at a time when we are beginning to see some real progress in terms of economic growth, sustained growth and sustained job creation."

A number of state programs funded by federal grants -- including higher education, research, and law enforcement training -- would likely be suspended, and all National Parks -- such as Yosemite, Mount Rushmore and the Grand Canyon and monuments -- would close. Local industry and tourism would suffer, as the effect of unpaid government contracts and closed national parks would likely result in the loss in revenue.

In winter 1995, the national parks reported they turned away about 2 million visitors during the shutdown. The number of shunned tourists could be much higher this time around as the weather starts to warm up.

The Social Security Administration would most likely continue to send out benefit checks, but the White House has warned that no new applications would be accepted or processed in the event of a shutdown.

Some people fear that the backlog of newly retired Social Security applications could eat into consumer confidence, but Faucher said the impact would not be as bad as some may expect.

"The Social Security recipients will eventually get their benefits," Faucher said. "That may displace some economic activity and may delay it somewhat, but I don't think it will be a substantial impact."

Aware of the potential negative effects a government shutdown would have on the U.S. economy, President Barack Obama has made it clear that he and his administration are currently working to find a solution agreeable to all sides.

So whos going looting with me in ??

[Nitestalker 792]

All i can say is...

Stupid republicans...Stupid democrats. They're all retarded.

[Illogical 1126]

[ChosenOne2000 4440]

My mid month pay will be cut in half. Sucks....

[tex1an2 680]

My mid month pay will be cut in half. Sucks....

Sadface!

This is what happens when an immovable object meets a unstoppable force. Republicans and Democrats are so polarized we can't get anything done! Rise up, moderates. We'll take over this country in due time.

[ChosenOne2000 4440]

Sadface!

This is what happens when an immovable object meets a unstoppable force. Republicans and Democrats are so polarized we can't get anything done! Rise up, moderates. We'll take over this country in due time.

Nah, they're just mad cus I'm stylin' on them.

[Marine 2580]

Honestly, I believe we need to switch out the old with the new. Meaning a reformed government, it just seems so "You're either with republicans or democrats" and if you're with one party you pretty much seem to side with them, even if you disagree with the issue. It's amazing to me how downhill our country has gone. If I lived in D.C. I'd want to protest with a very large group of people. I honestly can't stand the Republicans OR Democrats anymore, mainly the Republicans though.

[Clay 24]

RON PAUL 2012 MOTHERFUCKERS.

I have a feeling I'm either greatly underestimating the importance of this or greatly overestimating the importance of this.

[Oracion 35]

Hmm.

95: Democratic pres with republicans holding up bills and arguing about what is good.

2011: Democratic pres with republicans holding up bills and arguing about what is good.

I think I see a pattern here.

[JFK 546]

Hmm.

95: Democratic pres with republicans holding up bills and arguing about what is good.

2011: Democratic pres with republicans holding up bills and arguing about what is good.

I think I see a pattern here.

You beat me to it.

[Frosted Butts 53]

You beat me to it.

You were the only good president...

[Mitch 2111]

Hmm.

95: Democratic pres with republicans holding up bills and arguing about what is good.

2011: Democratic pres with republicans holding up bills and arguing about what is good.

I think I see a pattern here.

Yup. Bush was an idiotic president, declaring war, cutting taxes and spending more all at the same time was a genius idea.

[TimeToDie 39]

Only 2hours and 30mins left till shutdown ;(((

[Caterpi 3]

Dumb repubs and democrats, this is why i'm part of the rent is too damn high party

[Guest Tasty]

It's the end of the United States as we know it.

The government is so corrupt, it's scary to read what they've fucked up next on CNN.

[Someguy 85]

Came to a resolution, government will not be shut down.

Talk about cutting it close, 30 min to spare...

http://www.bbc.co.uk/news/world-us-canada-13022575

[Howard Dean 2502]

Woooo my pay came, as little as it is!

[Jewinator 5000 750]

Came to a resolution, government will not be shut down.

Talk about cutting it close, 30 min to spare...

http://www.bbc.co.uk/news/world-us-canada-13022575

Thank da lawd.

[Beefwipe 11]

If us britfags can have a coalition government, why can't Americans.

A lot of people don't think it's working, but I do. They're making cuts to a lot of things, but people don't realise that it's fucking necessary.

[Scopene 8]

Wasn't there an sG plan to take over the world a while back?

[Guitar Guy 25]

Wasn't there an sG plan to take over the world a while back?

Can I be the engi for the NWO?

[Nitestalker 792]

Fortunately our government is still here....Unfortunately so are the fucktards running it.

[Mitch 2111]

Fortunately our government is still here....Unfortunately so are the fucktards running it.

Haha, god damn political parties.

[Marine 2580]

I say this...We've tried Many White Presidents...A half black president so far...I think it's about time we switch out everything to Asian congress, Presidents, and Senate...Then see how quick our economy recovers.

I greatly approve of this, and I'm not even Asian.

[Mitch 2111]

I say this...We've tried Many White Presidents...A half black president so far...I think it's about time we switch out everything to Asian congress, Presidents, and Senate...Then see how quick our economy recovers.

I greatly approve of this, and I'm not even Asian.

wat