White House puts shutdown contingency plans in play

The Obama administration has ramped up its contingency plans for a government shutdown as a budget deal looks increasingly unlikely.

While Obama met with Speaker John BoehnerJohn Andrew BoehnerFormer top Treasury official to head private equity group GOP strategist Steve Schmidt denounces party, will vote for Democrats Zeal, this time from the center MORE (R-Ohio) and Senate Majority Leader Harry ReidHarry Mason ReidAmendments fuel resentments within Senate GOP Donald Trump is delivering on his promises and voters are noticing Danny Tarkanian wins Nevada GOP congressional primary MORE (D-Nev.) just down the hall in the Oval Office, Jeff Zients, the administration's point man for shutdown contingency plans, told reporters that the Office of Management and Budget began letting federal employees know Thursday if they will be furloughed in the event of a shutdown.

Zients ticked off a list of services that would cease at midnight Friday if Democrats and Republicans fail to reach an agreement on a deal that would fund the government for the rest of the fiscal year.

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One example Zients gave was that U.S. military members will continue fighting the country’s wars, but they will not be receiving paychecks.

“They will continue to earn their money, but they will not receive paychecks,” Zients said.

Even White House staff would be scaled back significantly, with a number of political appointees joining federal workers in being furloughed.

OMB Director Jack LewJacob (Jack) Joseph LewOvernight Finance: US reaches deal with ZTE | Lawmakers look to block it | Trump blasts Macron, Trudeau ahead of G-7 | Mexico files WTO complaint Obama-era Treasury secretary: Tax law will make bipartisan deficit-reduction talks harder GOP Senate report says Obama officials gave Iran access to US financial system MORE on Thursday afternoon began officially informing federal agencies of what they can and cannot do if the government shuts down, and employees began receiving notice of furloughs on Thursday.

Zients said OMB has been planning for shutdown contingencies for weeks, but the office stepped up its work this week. Zients emphasized that the administration is hopeful a shutdown can be averted.

“We're taking these steps because responsible management demands it,” Zients said.

Zients said OMB is not giving employees who would be furloughed a worst-case scenario about how long a shutdown could last.

But even a brief shutdown that lasts a few days would have a significant and detrimental effect on the economic recovery, Zients said.