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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 BoehnerRestoring fiscal sanity requires bipartisan courage GOP congressman slams primary rival for Ryan donations Speculation swirls about Kevin McCarthy’s future MORE (R-Ohio) and Senate Majority Leader Harry ReidHarry Mason ReidWATCH: There is no Trump-Russia collusion and the media should stop pushing this The demise of debate in Congress ‘North by Northwest,’ the Carter Page remake 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 LewBig tech lobbying groups push Treasury to speak out on EU tax proposal Overnight Finance: Hatch announces retirement from Senate | What you can expect from new tax code | Five ways finance laws could change in 2018 | Peter Thiel bets big on bitcoin Ex-Obama Treasury secretary: Tax cuts 'leaving us broke' 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.