There’s been lots of talk in the news about the current government shutdown, and at this time, there’s no clear indication of when the situation will be resolved. But how is the shutdown affecting the American family? Here’s a list of some of the ramifications of the government shutdown:
- According to a CNN analysis, “most of the 3.3 million government workers are deemed “essential” and will keep working. But more than 800,000 government employees have been furloughed.”
- About 97 percent of NASA’s 18,000 employees are idled.
While military pay has continued for service members at this time, the military will feel cuts in other areas due to the government shutdown. For example, changes of station for military personnel will be delayed, medical offerings could be scaled back, and facility and weapons maintenance could be suspended. Additionally, military commissaries (base grocery stores) have shut down and military families are being forced to shop elsewhere. According to the Defense Commissary Agency, military families generally save more than 30 percent on average at the commissaries. Shopping on the economy can be pricey, especially for military families living in cities with a high cost of living such as San Diego.
According to a Washington Post article, “if the shutdown lasts for more than two or three weeks, the Department of Veterans Affairs has said that it may not have enough money to pay disability claims and pension payments. That could affect some 3.6 million veterans.”
Effects on the economy
According to an estimate by Brian Kessler, an economist with Moody’s Analytics, “a three- to four-week shutdown would cost the economy about $55 billion.” Two previous shutdowns—in late 1995 and early 1996—cost the country $1.4 billion.
Other effects (extrapolated from a Sept. 30, 2013 Washington Post article)
- More than 400 national parks, zoos, and museums are closed to visitors.
- The National Institutes of Health stopped accepting new patients for clinical research and stopped answering hotline calls about medical questions.
- The Centers for Disease Control and Prevention stopped its seasonal flu program.
- The Department of Agriculture cut off support for the Women, Infants and Children (WIC) program.
- The Department of Housing and Urban Development isn’t providing local housing authorities with additional money for housing vouchers.
- The Department of Homeland Security suspended its E-Verify program and now businesses can’t check on the legal immigration status of prospective employees.
- The Justice Department had to suspend many civil cases.
- The Environmental Protection Agency offices closed.
- The Labor Department’s regulatory offices closed.
- No federal home or small business loans are being processed which may lead to a drag on the housing recovery.
- Gun permits aren’t being processed due to the shutdown of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
- Passports aren’t being processed which will affect tourism and airline revenues.
A list of other possible effects of the shutdown can be found on the website of Representative Rush Holt (D-N.J.)
What won’t be affected?
- Offices providing for the national security will remain open including the U.S. military and embassies abroad.
- The FBI, DEA, emergency medical care, border patrol, federal prisons, most law enforcement, emergency and disaster assistance will continue.
- Air traffic controllers, hazardous waste handlers and food inspectors will continue to work.
- Overseeing the banking system, operating the power grid, and guarding federal property will continue.
- The mail will continue to be delivered and the Federal Reserve will remain open.
- Social Security checks and certain types of veterans’ benefits (including veteran’s hospitals) will continue.
- Unemployment benefits and food stamps will continue for the time being.
- The Affordable Health Care Act (aka ObamaCare) implementation will continue because its funds aren’t dependent on the congressional budget process.
- The president will continue getting paid his $400,000 salary during the shutdown and Congress will keep getting paid as well since the 27th Amendment prevents them from changing their own pay.
- Citizens must continue to pay their taxes.
Robert Longley, a guide for About.com, has compiled a very thorough article titled, Government Shutdowns: History and Effects of Government Shutdowns.
According to a CNN report, the biggest hit to America would be to its “collective psyche” since, “America is the largest economy in the world and a beacon for how democracy ought to work.” Add to this the fact that the nation is set to hit the debt ceiling and go into default in mid-October and what we are left with is a major blow to the morale of the American people.
Parents, we encourage you to use our country’s financial crisis as a launching pad to educate your children about financial success and independence, including forming the right habits and behaviors at a young age. Our award-winning simple step-by-step money-management certification program for kids is designed to enhance learning and ensure success.
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