For our soldiers, a government shutdown would mean being required to report for duty, but not getting paid. Some Social Security benefits for seniors “could be delay[ed] and new claims may be not be processed.” For smallbusiness owners, a government shutdown poses a real threat as it would likely mean small business loan applications would not materialize. Lifesaving clinical trials at the National Institute of Health could turn new patients away. According to The Denver Post, long term flood recovery efforts could be jeopardized too.
A
shutdown would be devastating for ordinary Americans from military
families and seniors to small business owners and sick people in need of
health care. But the GOP’s recklessness doesn’t end there. They are
willing to go further, forcing a default on our nation’s obligations
trying to stop ObamaCare.
Mark Zandi, former economic advisor for John McCain’s Presidential Campaign has said that a default over the debt limit would cause a severe recession and U.S. Chamber of Commerce President Thomas Donohue said “it is insane not to raise the debt ceiling.”
See below for select stories on the real life impact of the GOP’s shutdown-default gambit:
Politico // Leigh Munsil
The
threat of a federal government shutdown is even more bad news for a
defense industry struggling to weather sequestration. Following a summer
of Pentagon furloughs and with other sequestration cuts starting to
sink in, the government — caught between a gridlocked Congress and a
dug-in White House — is marching to the brink of a complete halt, which
industry sources say could do irreparable damage to defense firms. “A
shutdown means that there’s no additional funding that is made available
for contracts,” said Elizabeth Ferrell, a partner at McKenna Long &
Aldridge who’s worked in government contracts law for more than 30
years.
Navy Times // Rick Maze
With
one week to go before a potential partial government shutdown, a key
Republican lawmaker is warning troops to be financially prepared for the
possibility of not getting a mid-October paycheck. Rep. C.W. “Bill”
Young, R-Fla., chairman of the House defense appropriations
subcommittee, warns that the troops’ morale and readiness will suffer
even though the Defense Department does not shut down when its funding
stops. “All military personnel will continue to serve and accrue pay,
but will not actually be paid until appropriations are available,” Young
said. The mid-month payday would be the first in jeopardy.
Additionally, he said most travel and permanent change of station moves
“would be delayed or canceled” and benefits for line-of-duty deaths also
would be suspended. Military hospitals and clinics will remain open but
would scale back on operations, “impacting routine medical and dental
procedures,” Young said. He did not specifically mention any impact on
Tricare health insurance benefits, but in past government shutdowns,
payments to medical providers were delayed but treatment was still
available.
Bloomberg // Mike Dorning
Even as the U.S. stock market roars to new highs, helped last week by the Federal Reserve,
a risk is rising from another corner of Washington. Hardening
positions on the federal budget and borrowing limit, and recent
political setbacks suffered by both President Barack Obama and
Republican congressional leaders as they go into the fight, are raising
the odds of a government shutdown, debt default or near-miss that could
roil equities markets. “We are in for another ugly confrontation,” said
Howard Ward, the chief investment officer for growth equity at Rye, New
York-based Gamco Investors Inc., which oversees about $40 billion.
“Even though everyone knows the impasse will be short-lived, it is a sad
reminder of how dysfunctional Washington has become. It will be a
catalyst for taking profits after the recent run-up.” Forty percent of
global investors surveyed in a Sept. 10 Bloomberg poll said they would
pull back on U.S. markets in the event of a government shutdown, which
many economists say would be less damaging than a debt default. “This
is a sleeper issue right now, but it could really come to the fore,”
said Chris Rupkey,
chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
“There is a risk of the stock market selling off a thousand points over
two or three days.”
The Denver Post // Allison Sherry
Longer
term recovery efforts, however, staffed by full-time FEMA employees
could be affected. All of Colorado's Republicans say they don't want a
government shutdown, arguing it would be bad for the economy and the
state. They stopped short of saying what they will do, however, next
week when the Senate likely sends them back a "clean" funding measure
that doesn't touch the Affordable Care Act.
Platts // Bobby McMahon
US natural gas industry officials and regulators expressed concern Friday that a prospective October 1 federal government shutdown would delay the review and permitting for key projects while hamstringing agencies' ability to police the energy markets. "Taking our cops off the beat for even a few days could have disastrous impacts on these markets that consumers depend on," US Commodity Futures Trading Commission member Bart Chilton saidFriday. "Under a shutdown scenario, government regulators will be handcuffed in our ability to go after crooks who are trying to evade oversight and protection of markets," Chilton said. "You can bet the 'do-badders' are licking their chops."
US natural gas industry officials and regulators expressed concern Friday that a prospective October 1 federal government shutdown would delay the review and permitting for key projects while hamstringing agencies' ability to police the energy markets. "Taking our cops off the beat for even a few days could have disastrous impacts on these markets that consumers depend on," US Commodity Futures Trading Commission member Bart Chilton saidFriday. "Under a shutdown scenario, government regulators will be handcuffed in our ability to go after crooks who are trying to evade oversight and protection of markets," Chilton said. "You can bet the 'do-badders' are licking their chops."
CNN Money // Jessiva Dabrowski
The
last time there was a shutdown that long was at the end of 1995, when
the government was shut down twice for nearly four weeks combined. The
CBO estimated those shutdowns shaved only about half a percentage point
off growth in the fourth quarter of that year. Zandi said he is assuming
a greater hit this time for two reasons. The first is timing: The 1995
shutdowns started in the second half of the quarter. This time, if
Congress fails to pass a funding bill, the shutdown will begin on Oct. 1, the start of a new quarter.
ABC // Elizabeth Hartfield
One
department where workers would likely have to hunker down while the
shutdown plays out is the Small Business Administration, which, among
other things, approves applications for loans to small businesses. These
services would probably be suspended in a shutdown and depending on how
long the last shutdown lasted, applications could get backlogged,
meaning the impact could be felt even after the government reopens.
WUSA9 // Jessica Doyle
If the government shuts down, then impact could hurt local economies. WUSA 9's Jessica Doyle asked Maryland'scomptroller,
Peter Franchot, what he's expecting. "Well, it could have a devastating
impact because Maryland is a rich state. We're a great economy but
we're joined at the hip to the federal government. Almost a third of all
the economic activity in the state is attributable to the proximity to
the federal government, so that's a huge problem for us and we
desperately hope that the powers that be in Washington will work things
out. "Even if they don't, we have a real middle class employment and
wage situation in Maryland," said Franchot. They wrote down
the withholding estimate for next year by $324 million. Franchot
explained why that is important: "Those are middle class receipts
coming in, and boy, it means we have an employment problem and we also
have a wage growth problem." One way he's looking at making adjustments
is by calling for fiscal prudence going forward. What is that going the
mean for the state of Maryland?
Politico // Kate Brannen
The
armed forces and their families are once again facing the possibility
of delayed paychecks. If Congress and the White House can’t reach a
spending deal by the end of the fiscal year on Sept. 30, members of the military would be expected to work during the shutdown, but would not get paid until the issues are resolved.
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