Another Shutdown Looms

Shutdown 2018Another Shutdown LoomsSpoiler: There are no real winners in a shutdown.

Budget & Tax, National Security,  | Quick Take
Dec 18, 2018  | 5 min read | Print Article

Here we are, staring at yet another shutdown conversation. We’ve had so many, we have a page devoted to the subject, believe it or not. Lots could change is changing, by the minute, as the powers-that-be stare at the terrible optics of people going without paychecks, even if temporarily, just before Christmas. Government Grinch much?

A partial shutdown would start after midnight Friday. If it only lasts the weekend, there won’t be much impact. Although that’ll be cold comfort for anyone who is looking to, say, visit national parks or, in our backyard, the Smithsonian or monuments – the things people tend to look forward to during the holidays. In addition, a partial government shutdown would affect courts and many other administrative activities of government – permits, reviews, licenses, emergency passport processing.

Who Gets To Work?

“Essential personnel” will report to work, those furloughed cannot show up for work. Here’s what that picture will look like across the various affected agencies.

Unless legislation funding the following departments is enacted prior to Friday, they will be forced to furlough workers – Agriculture, Commerce, Homeland Security, Housing and Urban Development, Interior, Justice, State, and Transportation.

However essential personnel from the following agencies will continue to work – the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, Border Patrol, and Transportation Security Administration. (Just in time for one of the busiest travel periods in the year.)

Five of the twelve spending bills have been enacted so departments not affected include the departments of Defense, Energy, Labor, Health and Human Services, Education, and Veterans Affairs. Also not affected will be the Bureau of Reclamation and legislative branch agencies like the Government Accountability Office and the Library of Congress, and Congressional Budget Office.

What Will It Cost Taxpayers?

How much does a shutdown cost? It varies, so it’s hard to quantify. In 2013, the government shutdown for 16 days and the Office of Management and Budget estimated that workers were paid $2 billion for the time they were not working and furloughed. The Obama Administration estimated the 2013 shutdown resulted in $2-6 billion in lost economic output, reducing 4th Quarter GDP by 0.2-0.6 basis points.

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If past is prologue, workers will be held harmless and retroactively paid for days they are furloughed. Considering the timing, it is extremely likely that they will be paid for those days they did not work.

There are no real winners in this scenario, except possibly Democrats since President Trump has already offered to take credit for a possible shutdown.

The Wall

Given that funding for the border wall is the sticking point, here is a quick refresher on the dollars and cents at the heart of this fight.

TCS recently analyzed spending on border barriers since 2007 and found that $9.7 billion has been spent, primarily on various types of fencing. Right now, the two sides are $3.4 billion apart on the border wall. The Department of Homeland Security appropriations bill draft includes $1.6 billion in funding – which is what DHS asked for in its FY19 budget request. President Trump now says he must have $5 billion for a border wall (not border security, not border barriers, but a border wall). However, DHS has never sent a budget amendment to the Congress that explains how or where that $5 billion will be spent. So the Appropriations Committees, if they acquiesce to this request, would be flying blind on what the money is actually spent on – a poor way to run a budget when we’re already past $21 trillion on the debt.

The president recently stated he would get the money for border construction from the Pentagon (much as he is sending military troops to the border to support CBP). Since the Pentagon spending bill, which has already been signed into law, does not include money for a border wall, the Pentagon would actually have to come back to Congress for a “reprogramming” of funds to do any wall work.

Any reprogramming request would be handled by the next Congress and highly unlikely to be approved by the relevant committees in the House of Representatives. But that would presumably be after fiscal year 2019 appropriations are enacted.

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