Welcome to Shutdown

Today is the first October, first day of 2014 fiscal year, and because of the failure of Congress, the first day of the government shutdown. Yesterday, we were facing a unsustainable fiscal outlook and we were dealing with the consequences of sequestration. But today, things are needlessly worse. The following are now true:

• More 800,000 federal employees are unable to go to work: The Washington Post has been keeping a tally of furlough decisions and has estimated that over 800,000 of the federal government's 2.1 million civilian employees will be sent home after reporting to work today. They will not receive pay during this period and backpay is not guaranteed.
• National Parks, Monuments, and the Smithsonian museums are now closed: The country's National Parks have closed, not only canceling the plans of many visitors, but also forgoing revenues from tourists. The Smithsonian institutions are also closed, with only security and National Zoo staff retained to maintain those facilities. Unfortunately for all of you panda lovers, the panda cam at the National Zoo has been turned off.
• Many government-supported research projects are on hold: Some staff will be retained to protect research property and medical services will be continued to be provided by NIH, but many projects at NASA, the National Institutes of Health, and many other research agencies will be halted for the meantime.
• Farmers now may find it harder able to obtain loans: Much of the activities of the Department of Agriculture will be curtailed, including housing loans to rural communities.  
• E-Verify is not available: The Department of Homeland Security will be able to run most of its programs, but  employers cannot access E-Verify information to confirm employment eligibility.
• It is harder for small businesses to get a loan: While the existing Small Business Association's loan guarantees will remain in effect, the agency will stop processing new loans until the shutdown is ended.
• The IRS is unable to process returns: We've said before that providing the IRS with more funds could actually close the "tax gap" of uncollected revenues. Instead, about 90 percent of the staff will be furloughed.
• The CBO is largely closed for business: The Congressional Budget Office, which we routinely rely on for budgetary analysis, will almost completely shutdown this afternoon, only retaining staff necessary to analyze legislation being actively considered by Congress. While lawmakers will still be able to obtain budgetary scores of any bill they consider, the closure of the agency responsible for most of the budgetary analysis speaks greatly of the progress lawmakers have made.
• Washington DC's city government continues to run on its reserve funds...for now: For those here in Washington, Mayor Vincent Gray has declared all of the city employees to be "essential" and will use a cash reserve fund to keep the city functioning fully for a few weeks. But if the government shutdown drags on, basic services in DC like trash collection could be affected as well.

These are just a select few of the things that are now true, just because Congress could not do its job. Our Government Shutdowns Q&A goes into more detail based on our previous experience with shutdowns in the 1990s.

This unnecessary crisis comes after we've talked time and time again about the benefits of providing a clear long-term plan for the nation's finances. Today's actions do not show the country we are serious about addressing the debt, in fact, it shows quite the opposite. As CRFB President Maya MacGuineas said in a press release:

The Campaign to Fix the Debt believes it is truly shameful that the most powerful nation in the world couldn’t reach a compromise to keep the government running. While the government may be shutting off its lights, the American people are at home trying to provide for their families, wondering why their nation's leaders are unable to work together.

This avoidable outcome highlights a dysfunction that threatens to spill over to other areas – like raising the debt ceiling – where failure to reach agreement would not just be disruptive, but have disastrous economic consequences both at home and abroad.

Congress has let an opportunity slip by and each day they fail to act the consequences will grow. Meanwhile, we are now only a few weeks away from needing to raise the debt ceiling, which could be far more dangerous. Addressing the real structural problems with our entitlement programs and tax code will be hard enough without these political detours. We hope lawmakers come to their senses and agree upon a government funding bill and debt ceiling increase, so we can turn to the real issues.