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July 3, 2022

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What a government shutdown would look like in Nevada

U.S. Capitol

Associated Press

The setting sun is reflected in the windows of the U.S. Capitol on Friday, March 22, 2013, in Washington.

Congress has less than two weeks to come up with a funding mechanism to keep the federal government humming, but an escalating fight over the Affordable Care Act — which is also supposed to launch in less than two weeks — is threatening to make lawmakers miss their deadline.

House Republicans are planning to vote on a budget bill today that will also defund the health care law. The Senate will invariably strip out the Obamacare language, or kill the bill. Then it will go back to the House again.

And until somebody blinks, the two houses of Congress shall be engaged in a political ping-pong match that could easily go past Sept. 30, causing a government shutdown this country hasn’t seen since the '90s.

If that news elicits only a shrug, it’s understandable. Lawmakers have been crying wolf about the potential of government shutdown periodically over the past two congressional terms — yet at the last minute, the cavalry always seems to ride in with a deal to avoid disaster.

The current threats, however, may be more plausible than earlier occasions when Congress sounded an alarm. For the first time, there’s a solid faction of the Republican Party openly angling for a shutdown and for lawmakers to vote to prove how much they really hate Obamacare.

And it’s not like Democrats are about to wave a white flag in surrender just days before the health care exchanges are scheduled for their national debut.

So if a government shutdown is on the horizon, what would it look like for Nevada? Here’s a list of what and where to expect the local effects.

    • Federal workers

      If you’re one of the 11,000 to 12,000 civilians employed by the federal government in Nevada, the government shutdown looms most obviously for you. If you work in a federal office building, you’ll probably be furloughed. Or, if you work for a federal court or an agency that provides services that can’t easily be interrupted, you may be asked to work without pay for a while — with the promise that once the government opens for business again, you’ll get back pay.

      Same goes for the active-duty military — the country can’t sacrifice its military readiness during a shutdown, but senior White House officials warn that soldiers shouldn’t expect to be paid for their service until after the shutdown ends. And military contractors? Well, there’s no obligation to pay contractors through or after a federal government shutdown. So it really depends on where you are in your contract — if the money has already been disbursed, your work can keep going. But if you’re waiting to see the cash, be warned: The workers who process contracts will probably also be furloughed.

    • Federal buildings and courts

      Federal buildings, by and large, would close for the duration of a government shutdown, but there are a few exceptions — the courts, for example, could stay open.

      It all depends on what the Justice Department decides to do as the date of shutdown draws closer.

      Past experience offers some guidance, however: In the spring 2011, when Congress was once again working against a deadline to avoid a government shutdown, the DOJ decided that the federal court system could keep operating on non-appropriated funds for a few weeks before they would think about paring down activities.

      If there is a shutdown, it shouldn’t surprise anyone that it may get longer to have a case heard in federal court if it is not already in the pipeline. Nevada has already been contending with backlogs in civil cases at the federal level for months.

      And anyone called for jury duty in federal court should also temper their expectations. While you may need to show up to hear a case through a shutdown, the person who processes your per diem checks might not. So you may end up having to wait for your money.

    • Taxes

      Yeah, you still gotta pay 'em. But you might have to wait a little longer to get your tax return, as the person tasked with processing may find him or herself furloughed.

    • Unemployment benefits

      Your eligibility does not run out just because the federal government stops running temporarily. The real concern is, what if the federal government runs out of funds? At that point, it would be incumbent on state governments to find a way to bridge the gap between their obligations to the out-of-work job seeker, and lack of federal funds available to meet that obligation. In one way, that may seem only fair, as states — including Nevada — tapped the federal government to bail them out during the recession (and are still paying back those debts). But for a state on a tight budget itself, coming up with that sort of money to sustain a high-unemployment population could increase local financial stresses.

    • Social Security

      Social Security is a lot more secure than unemployment benefits. Since Social Security is a mandatory spending program, it gets top billing when it comes to a financial crisis. Not everything goes instantly dark and the president has some authority to push funds around to soften a potential shutdown blow. During the last protracted shutdown of 1995, then-President Bill Clinton managed to avoid any adverse effects on processing Social Security payments. But there will be delays in processing and adjudicating new claims.

    • Veterans' benefits

      Veterans’ benefits work a lot like Social Security benefits during a government shutdown. Payments are a government obligation, and meeting it is a first priority over other appropriations. And no one need worry about the VA hospitals and health centers — medical facilities are considered emergency facilities, so those stay open.

      Yet as with Social Security, the pace of processing new benefits could slow down — and this is potentially a more worrisome problem for Nevada veterans than it is for senior citizens and disabled individuals dependent on Social Security payments. Nevada vets are already facing record delays and backlogs in application processing. If a shutdown increases that burden, it could start to undo many of the gains the VA has made in improving its pace and erasing the local backlog.

    • FHA loans

      The Federal Housing Administration makes accessing home loans easier for first-time and poorer home buyers. Since the housing market in Nevada crashed, dependence on FHA spiked — and FHA still backs about 20,000 new loans a year, and guarantees about 20 percent of the current loans in the Las Vegas Valley.

      But if the government goes into shutdown mode, FHA employees won’t be on the job — which means they can’t review and approve applications for guaranteed loans. That means some would-be homebuyers may not be able to afford those purchases. And over a long period of time, that could become problematic not just for those would-be homeowners but for the local housing recovery as well.

    • Renewable energy research

      The Obama administration has identified scientific research grants as another area that could experience delays. In Nevada, this could have consequences in areas like the renewable energy industry. Again, timing makes all the difference here: Recipients who have received a disbursement recently can probably ride out a government shutdown just fine. Any program expecting a payment around the start of the fiscal year, though, may find they have to wait a while.

    • Food stamps and other public assistance

      In the short term, food stamps should be fine, but it depends on how long the shutdown lasts.

      Food stamps are one of several programs administered by states that depend on federal money. Usually, that federal money comes in chunks throughout the year, leaving the program a way to budget itself through a shutdown, provided that shutdown does not take effect just before the next federal contribution was expected.

    • Planning travel — or expecting visitors?

      You might want to accelerate your planning a little. Passports and visas don’t get processed as quickly — if at all — during a shutdown. In the shutdowns of the 1990s, tens of thousands of travelers and visitors found their plans abruptly halted when applications went unprocessed due to a lack of personnel.

      Close to home, the stakes of this are far higher than whether you have to reschedule a weekend in Mexico. A slowdown in visa processing could slow down the local tourism industry.

    • But the mail must go through

      The Postal Service has its share of ponderous financial problems. But it's self-funded, making money off the stamps and services you purchase, not the government’s funding cycle. So the federal government could pull the plug on everything, and the mail keeps on coming.

    • Obamacare

      The ongoing Obamacare fight is the only reason Congress is discussing a government shutdown at the moment. So if the government shuts down, will that take a bite out of Obamacare?

      In a word, no.

      The Congressional Research Service weighed in on this question this summer, per a request by Sen. Tom Coburn, R-Okla., a conservative Republican who doesn’t support the idea of shutting down the government to take a stand on Obamacare.

      Their basic point: Most of the money the government would need to open the health care exchanges on schedule has been sunk, and hence isn’t wrapped up in the year-to-year budgeting process. The agencies also have ways of moving extra money around to keep essential services going.

    • Where it won't happen

      A government shutdown may sound like utter doomsday, but no matter what happens with the budget, the essential and emergency functions of the country will not be shuttered — unless the shutdown lasts for months. (The longest case on record was 21 days.) Police, firefighters, medical emergency workers, air traffic controllers, border patrol agents and members of the military all stay on the job.

      It’s when we start talking about the debt ceiling that the security of those emergency services and industries start coming into question.

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