Government shutdowns in the United States

WASHINGTON – Facing a down-to-the-wire drama, U.S. agencies braced for a possible federal shutdown that would begin at the end of the day Thursday if Congress doesn’t pass a bill to keep the government running. 

Hundreds of thousands of nonessential federal employees could be furloughed beginning Friday – forced to take time off without pay – if Congress does not avert a shutdown before funding expires at the end of the fiscal year, which occurs at midnight.

The federal workforce has already been upended for the past 18 months during the coronavirus pandemic, which forced many government workers, like other Americans, to stay home under their safety restrictions. 

The National Parks Service, which has closed some parks and facilities during past shutdowns, is among the departments reviewing contingency plans. Spokeswoman Jenny Anzelmo-Sarles said Wednesday that “determinations about specific operations and programs have not been made.”

Employees deemed necessary to protect life and property such as air traffic controllers, law enforcement, public health officials and federal firefighters would continue to work if the government shuts down, but they wouldn’t be paid until Congress appropriates funding.

“It would be devastating if there’s a shutdown,” said Max Stier, president and CEO of the Partnership for Public Service, a nonprofit focused on good governance. He pointed to the  pressures the pandemic placed on workers and said although the federal government would maintain emergency services, “it does that at a real cost” by not paying employees. 

4 Ways a Government Shutdown Could Impact the Footwear Industry

With Thursday’s deadline looming, U.S. lawmakers are still in talks over an agreement to prevent a lapse in government funding. If Congress doesn’t pass the necessary bill by midnight on Oct. 30, it will force a federal government shutdown, leading to worker furloughs and reduced operations at certain government agencies.

To understand its impact, one only needs to look back a few years.

For the U.S. footwear industry, like much of the country, the 2018-2019 shutdown — the longest in history, lasting 35 days — remains a painful memory. That partial shutdown took a $3 billion bite out of economic growth during the final three months of 2018, according to an estimate by the Congressional Budget Office.

Now, in 2021, political stalemates in the House and Senate are once again obstructing the government’s ongoing operations in ways that threaten to impact the economy and reverse some of the progress made in the wake of the pandemic. Here are four ways this potential full government shutdown could affect shoe companies and retailers:

Stock market volatility

While the U.S. stock market has soared since its pandemic lows, the threat of a government shutdown — and worse, a refusal on the part of Republicans to vote to suspend the debt limit — could destabilize this progress. In December 2018, the Dow dropped 9.7% — the largest single-month decline since February 2009 and its worst December since the Great Depression in 1931. This had ramifications for consumer sentiment, which in January 2019 fell to its lowest level in more than two years amid mounting worries about the U.S. and global economy.

National parks could close or go unstaffed. Airports could clog. And alarmingly, there could be more delays for the Centers for Disease Control and Prevention’s push to approve a coronavirus shot for youngsters.

In New York, it could mean longer lines at LaGuardia Airport, a closed-down Statue of Liberty and — at worst — disturbances to food assistance programs.

While the Empire State doesn’t expect an immediate impact from a federal shutdown on local government operations, the state is putting together a contingency plan.

“We are reviewing what impacts it may have on New Yorkers and how the state may be able to help,” said Freeman Klopott, spokesman for the State Division of the Budget.

Tax services

People interfacing with the Internal Revenue Service can face frustrations in a shutdown.

Customer service goes by the wayside, and New Yorkers could face headaches if they need verification from the IRS for certain data — social security numbers and income verification, for example — or assistance with paperwork.

Individual business tax refunds could be delayed, too, said Rachel Snyderman, an associate director at the Bipartisan Policy Center, a think tank.

No, not everything. A full government shutdown would mean federal agencies close their doors or reduce their operations to only what is deemed essential. Programs and agencies that receive mandatory funding or are self-sufficient, such as the U.S. Postal Service, will continue to operate. Only those programs and agencies that are dependent on annual appropriations will be running with empty pockets.

Essential services necessary for public safety such as air traffic control and law enforcement will keep operating — though not necessarily at the same levels.

If essential services continue, why should I care?

During a shutdown, agencies are stripped to the bone, providing only what is necessary to protect life and property or what is required by law. Agency services most directly connected to the public are likely to cease or be severely delayed, seeing “tremendous disruption and uncertainty” as they adjust to reduced staff and operations, according to David Reich of the nonpartisan Center on Budget and Policy Priorities.

National parks and Smithsonian museums will close, and while people will still receive their Social Security payments, benefit verification, processing overpayments and issuing replacement Medicare cards will stop.

There could be delays in air travel with reductions in the Transportation Security Administration’s workforce. If you have any questions about your taxes, there won’t be anyone on the other end of the line at the Internal Revenue Service because it will not be continuing its customer service.