A compromise brewing in Congress could delay a possible government shutdown until mid-March, but anxiety remains high among federal workers and contractors in Maryland — one of the states most dependent on federal spending.
Because Congress has not yet agreed on a budget for the fiscal year that started five months ago, the government is operating on temporary spending authority — and that runs out on Friday.
Republicans worked on Monday to persuade Democrats to accept a proposal to trim $4 billion over the next two weeks by eliminating programs that President Barack Obama also has targeted. The compromise could postpone a possible shutdown of many government services from Friday to March 18.
The Republican-controlled House is scheduled to vote on the measure on Tuesday. The Senate is expected to pass the measure afterward.
In the meantime, federal agencies are rushing to determine which employees would remain at work — those considered essential to protecting life and property — and which would be sent home if the budget-cutting battle is not resolved. Businesses that provide the government's goods and services are trying to figure out how they would absorb the financial hit and what to do with their own employees. And workers are wondering how long they would have to go without a paycheck.
Answers are hard to come by. Across the country, citizens are being bombarded with conflicting information about whether new applications for Social Security would be processed, what would happen to eagerly anticipated tax refunds and which government offices would close their doors.
"A lot of services just go by the wayside," said Mark Amtower, a consultant in Howard County who helps companies do business with the federal government, and who has no fond memories of the last shutdowns, at the end of 1995 and beginning of 1996. "Any way you look at it, it's a mess."
The congressional compromise in the works includes budget reductions that are fairly easy for both sides to agree on. But the House's overall budget proposal is aimed at reining in the huge federal deficit with more than $60 billion in cuts. The Democrat-controlled Senate has balked, saying such a decrease would gut services for vulnerable Americans and hurt the economic recovery. President Obama says he would veto that budget if approved.
The stakes are higher here than in most states. Maryland ranked fourth in the nation for per-capita federal spending in fiscal year 2009, the most recent government data. And it's a procurement powerhouse, with businesses in the state raking in more than $34 billion that year in federal contracting dollars.
Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute, estimates that 15 percent to 20 percent of Maryland's economy can be traced to federal spending on wages and contracting.
A shutdown would not be catastrophic, he said. But paired with the likelihood of budget cuts to follow, it would not be good news for the state. "This takes the wind out of the recovery here in Maryland," Clinch said.
Crystal Edwards of Glen Burnie, who has worked for the Department of Defense since 2006, is dreading a government shutdown. Many Department of Defense employees are probably exempt from furlough, as so-called "essential" workers, but at least some of the agency's civilian employees are not.
"A lot of people are anxious because they don't know what is going on," said Edwards, 35, a human resources manager. "Everybody is asking if they are essential and what makes an employee essential."
It also hasn't been decided if workers would receive back pay for the days they miss. They did after past shutdowns, but that's not required under federal law.
"We have people who may not be able to afford to stay home for two weeks or whatever they decide," said Edwards, who works in Alexandria, Va.
Agencies must have shutdown plans, but many are tight-lipped about how they are preparing for a shutdown and what services would continue.
Officials at Fort Meade and Aberdeen Proving Ground, major Army installations in the Baltimore region that both have a largely civilian employee base, said they have no information to share because the Department of Defense has not offered them any guidance. The Internal Revenue Service, asked about tax returns and refunds, referred questions to other agencies. The Woodlawn-based Social Security Administration, which employs 12,700 in Maryland, did not return calls.
"We had a meeting [Monday] and we learned nothing," said Witold Skwierczynski, head of an American Federation of Government Employees bargaining unit that represents most Social Security employees. "We learned that supposedly the agency hasn't decided in a government shutdown who they're going to declare essential and nonessential. … They haven't decided if they're going to close offices, keep a partial staff, close one day a week, close consecutive days — nothing."
He said he's getting reports that some Social Security offices are seeing a lot more traffic as Americans stream in to get issues resolved now.
But the Office of Management and Budget, which collects information on agencies' shutdown plans, is optimistic they won't need to be implemented.
"While we are of course planning for all contingencies, we remain confident that the congressional leadership is committed to avoiding a government shutdown," said Moira Mack, a spokeswoman for the Office of Management and Budget.
Shutdowns were commonplace during the Carter and Reagan administrations, but they were generally short-lived. After Republicans swept Congress during the first Clinton administration, a budget showdown spawned a five-day closure in the fall of 1995 that was followed by a record-setting three weeks of partial shutdowns.
Museums, monuments and parks let in no visitors. Passport offices didn't open. Social Security checks were mailed, but no new applications were processed during the shorter shutdown, Skwierczynski said. Most Veterans Affairs workers were kept on because they deliver health care, while everyone at the Department of Housing and Urban Development was sent home, said human resources consultant John A. Challenger.
Challenger expects a 2011 shutdown would look very similar.
"My sense is that except for the very core roles, all of the government offices would be shut down," said Challenger, of Challenger, Gray & Christmas.
Shutdowns are not popular. Republicans, blamed for the last closures, lost some ground at the polls in 1996 as a result, said John Fortier, a fellow with the American Enterprise Institute, a conservative think tank. That reduces the likelihood of a shutdown now — at least until Congress has exhausted several more temporary budget extensions, he said.
"I don't think anyone wants a shutdown," Fortier said. But Republicans feel cuts are necessary and believe the Democrats are not willing to go far enough, he added.
One key difference between the effect of a shutdown now versus closures in the 1980s and '90s is the ballooning number of government contractors, many providing services rather than goods and working from desks in federal facilities, said John F. Cooney, who worked on a shutdown plan for the government in the early 1980s at the Office of Management and Budget. Such a change makes it trickier to determine which people must continue reporting for work during a shutdown, he said.
It also increases the number of businesses that could lose revenue. Congress has never reimbursed contractors for money lost during shutdowns, as it has for federal employees, said Cooney, a partner at the Venable law firm in Washington.
Patriot Technologies Inc., a cybersecurity firm in Frederick that does 90 percent of its business with the federal government, was around during the last shutdowns and does not want to see a repeat. Delayed orders would not be too much of a problem. But every day its client agencies are closed is a day the company loses revenue for providing on-site services such as assessing network vulnerabilities.
"It's not going to put us out of business, but it it's a significant loss," the firm's president, Bruce F. Tucker, said of a government shutdown.
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Bitter debate over federal spending
A deal to avert a U.S. government shutdown took shape in Congress Monday, but the short-term spending measure would do nothing to resolve the bitter debate over federal spending.
Budget-cutting Republicans pressured Democrats to accept a proposal to trim $4 billion over the next two weeks by eliminating programs that President Barack Obama has also targeted.
With government funding due to expire Friday, Congress must act this week to avert a shutdown of everything from bankruptcy courts to passport offices.
The Republican-controlled House is scheduled to vote on the measure on Tuesday. The Senate is likely to pass the measure afterward, a Democratic aide said, and the White House said a shutdown is increasingly unlikely.
—Reuters