Impact of US federal government shutdown more than inconvenience

PUBLISHED : Tuesday, 01 October, 2013, 12:00am
UPDATED : Tuesday, 01 October, 2013, 2:26am

The most iconic image from the last big shutdown of the US federal government in 1995 was also its most misleading.

It was a sign on the door of Air and Space Museum in Washington saying, "Due to the Federal Government shutdown, the Smithsonian Institution must be closed. We regret the inconvenience."

But that shutdown, which lasted from December 16, 1995 to January 6, 1996 as Democratic president Bill Clinton battled a Republican-controlled House of Representatives, was a lot more than an inconvenience.

And it offers lessons about what Americans can expect, both in costs and reduced services, if a stalemate between Republicans in Congress and Democratic President Barack Obama leads to a shutdown today.

The 1995-96 shutdown held up passports for more than 200,000 people. It stopped stock offerings from coming to market. It blocked new admissions to the National Institutes of Health, the government's illustrious medical research facility.

And yes, national parks and museums did close. The paralysis produced millions of dollars in losses for tourist-dependent businesses. The cost to the federal government alone, according to an analysis by the Office of Management and Budget, was US$1.4 billion, most of it in back pay to laid-off workers who collected later for the inconvenience of staying home.

Elaine Kamarck, who worked in the White House during the shutdown and now directs the Brookings Institution's Centre for Effective Public Management, said she remembered only about 30 essential staff manning the Executive Office of the President instead of the normal hundreds.

She said citizens in the rest of the nation - including ones who rail about Washington - may think their local services are intact until the trickle-down effects of a shutdown become obvious.

"It will take a couple days and things that people do not think are part of the federal government will start shutting down," Kamarck said, because money from Washington is what keeps many of those services alive.

If today's shutdown materialises, it will be because of a similar stand-off - a political struggle in a divided government over fiscal differences.

But the added complication is that Republicans want to delay implementation of Obama's health care law. The White House has said that is non-negotiable, meaning that a deal to end a shutdown soon could be difficult to achieve.

Workers will be on the job if they are responsible for public safety, whether it's Coast Guard patrols or meat inspections, or fighting wars or guarding federal prisons. Americans who depend on Social Security retirement payments or Medicare health insurance will not be affected. But more than a million federal employees will be off the job for as long as the shutdown continues.