What are the Current Impacts, Locally, of the Federal Government Shutdown?

As the shutdown approaches 25 days, some folks have felt no impact.  Some have felt moderate impacts.  Some are massively impacted because they are not getting a paycheck and they are furloughed.  Our lobbyist in Washington DC put together this list of impacts late last week (Jan. 10th):

"Subject:          Impact of the Government Shutdown

...the continuing impacts of the shutdown are detailed below:

Immigration

With no funding for the Department of Homeland Security, immigration officials and border patrol officers are among those furloughed or working without pay. While judges and clerks are home, asylum cases are continuing to pile on to an already backlogged system, reaching over 1 million on the docket. Neither are companies able to utilize the E-Verify system to ensure they are hiring documented works, as the service are unavailable until the funding crisis is resolved. This issue means many companies, such as manufacturing firms who hire primarily immigrants, are scrambling to find workers.

Meanwhile, unpaid agents are taking in more than 2,000 migrants per day, many of them families and children, and have nowhere to detain them. This has led to the undocumented immigrants being released into border cities. There are also many asylum seekers coming to the border crossing with influenza, bronchitis, and other infectious diseases. Two children have already died in U.S Border Control and Protection custody, leading to extreme tension and concern over welfare.

Of the 245,000 employees at DHS, only about 14% will be paid. 179.000 will work unpaid, while 



32,000 are furloughed. The 17,000 employees at the U.S Citizenship and Immigration Services continue to process application, as the agency derives much of its funding from fees required for asylum requests and other filings.

Cybersecurity

Among the government workers furloughed are those at the newly created Cybersecurity and Infrastructure Security Agency (CISA), which replaced the National Protection and Programs Directorate (NPPD) at the end of last year. With 43% of the staffers furloughed, those remaining are busy keeping up with security operations, preventing the agency from growing and causing it to lose its “critical momentum” as it begins its 2 year plan. The goal of the agency was to find better ways to address both cyber and physical threats, but it was still in the beginning stages when funding lapsed. Advisors for the agency are concerned that the short-staffing will be seen by enemies of the state as an opportunity to launch an attack. Officials in the agency are also concerned that the lack of pay will cause cybersecurity experts to quit and pursue private sector jobs, where they would be making significantly higher salaries. The current gap in the cybersecurity workforce is already 498,000 in the U.S alone.

Small-businesses, Loans, and Licenses

The Small Business Administration stopped processing new loans on December 22^nd, leaving many business owners and start-ups in limbo as they await dollars to buy new property or to simply keep operations running smoothly. Without funding, small businesses are also unable to pay their contractors, who may then move on to other projects.

Along with SBA loans, private companies can’t get paperwork processed for initial public stock offering, as the Securities and Exchange Commission also has a much smaller crew than normal. Farmers, too, are feeling the sting, as they are unable to get Agriculture Department loans to offset the effects of the trade war.

While ports were deemed essential and are running fairly smoothly, exporters of high-tech commercial and military products must have government export licenses, creating a backlog of shipments. Typically, the Commerce Department’s Bureau of Industry and Security approves around 600 actions a week.

Financial institutions are unable to process transactions with actors covered by U.S sanctions without Treasury Department approval; while these, too, are routine requests, many banks find their paperwork pending.

Concern is mounting that the shutdown is hurting business confidence, and J.P Morgan has estimated that the U.S. economy is losing more than $1.5 billion a week due to the shutdown. Fitch Ratings also warned Wednesday that an extended shutdown might damage the country’s Triple-A credit.

Student Loans and Grants

Some of America’s most in need students have been unable to pay their tuition bills because the IRS cannot respond to requests for tax transcripts, which are needed for their financial aid applications. Some students are able to import their tax records directly to the applications, but the majority do not qualify and must utilize the phone or mail options, a process that takes two weeks.  Other disruptions include Pell grants, student loans, parent PLUS loans, and other forms of financial aid being blocked. These issues could prevent students from spring class enrollment.

Department of Transportation

Construction and transportation projects have been stopped or delayed nationwide, as state officials worry about federal assistance during the shutdown.  An extended lack of funding may also lead to an inability to fund current operations and maintenance of existing transportation system. States such as New Mexico and Montana gain 85% of their transportation funding from federal programs; typically this funding is available on the start of the fiscal year, but the government has been running on a now expired Continuing Resolution. Only a quarter of the $44 billion for highway projects and $11 billion for federal transit program were paid in October. Projects will likely only remain on track if the resolution of the shutdown comes in the next few days.

Entitlements

The USDA will run out of funding for the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants and Children (WIC) if the shutdown continues into February. This will effect around 39 million people. The shutdown has also halted federal spending on the Temporary Assistance for Needy Families (TANF) Program. However, benefits will continue in the short-term, funded by through a mixture of unspent federal funds and state "maintenance of effort" (MOE) funds.

Housing

The Department of Housing and Urban Development will not be able to renew contracts with contracted private apartment building owners to provide Section 8 subsidies for subtenants. This will affect approximately 1,150 buildings. HUD has set aside payments through March for the non-expired contracts, but have encouraged the others to use reserve funds. HUD set aside funding through February for local housing authorities that provide Section 8 vouchers. Those attempting to buy houses have also been left in limbo, as the USDA and Federal Housing Administration do not have the staff to approve mortgages. However, Single Family FHA loans, as well as VA loans, will continue to be funded throughout the shutdown, albeit with delays.

National Parks

The Department of Interior is continuing to allow visitors to National Parks across the country; however, rangers and employees providing basic services have been furloughed, creating worry over both the safety of Park visitors and the lasting impacts created by the lack of sanitation and park upkeep. In order to address these issues, some Parks have begun pulling funds from their entrance fees in order to employ a limited staff. This has created controversy surrounding not only the legality of the actions, but also the negative effects on Park projects down the line. 

Tax Payments

The IRS will still distribute tax refunds, a break from previous shutdowns.

Travel and Security

TSA agents, who are considered essential and therefore working unpaid throughout the shutdown, have begun calling in sick at much higher rates, sparking worries of understaffing, long lines, and airport security."