Shutdown could interrupt military pay, furlough 800,000

A government shutdown could furlough more than 800,000 federal workers, interrupt military pay, slow tax refunds, cancel this weekend’s Cherry Blossom Parade and stymie the economic recovery, the Obama administration warned Wednesday.

Lawmakers and the White House are working frantically to keep that from happening, but as of press time Wednesday, there were mixed signs on whether they were making any progress.

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The White House hosted a conference call with reporters Wednesday morning to emphasize the fallout that will occur if the two sides fail to agree on a spending plan before Friday’s deadline.

“From a housekeeping perspective, we’re cognizant it’s Wednesday and funding runs out Friday,” an administration official said. “All federal agencies are prepared with a contingency plan should appropriations lapse.” 

The call was also a part of the administration’s effort to direct responsibility toward the GOP, as both parties are worried they’d be blamed for a shutdown.

“The president has made it clear across the last few weeks and last few days that he doesn’t want a government shutdown because it will threaten the economic recovery,” the official said. 

Polls make it unclear who would be saddled with the responsibility. An NBC/Wall Street Journal survey released Wednesday found 37 percent would blame Republicans, 20 percent would blame congressional Democrats and 20 percent would blame the White House.

Meanwhile, the White House is still trying to determine the exact number of government employees who would be affected, but estimated the number would be similar to the number affected in 1995 and 1996, the last time the government shut down.

With Washington in the middle of its annual Cherry Blossom festival, a shutdown also would force the cancellation of the parade this Saturday as national parks and the Smithsonian museums would be closed.

A senior administration official singled out the parade, a popular tourist attraction, during the call.

Taxpayers will still have to file with the IRS, although they should do so electronically, the IRS commissioner said Wednesday.

IRS Commissioner Doug Shulman said that people who file electronically during a shutdown would likely not face any delays in having their returns — and potential refunds — processed. 

But taxpayers who file by paper, Shulman added, could see some delays. 

“We’ve got 100,000 employees. Not all of them are going to be coming to work. But we’re going to have a complement here,” Shulman said. “The most important thing for people to know is: We’re going to be accepting tax returns, and people should file.”

The deadline to file federal taxes this year is April 18. An administration official said audits would be postponed, however.

The Senate will furlough hundreds of employees and close dozens of Capitol services in the event of a shutdown.

All but one Senate gallery will be closed, as well as all but one Senate appointment desk. There will be no elevator operators, the barber and beauty shops will be shuttered, and the Senate’s employee assistance program will be closed except in the case of emergency.

The Capitol Visitor Center will also be closed, and no tours of the building will be offered. Senate parking lots will be closed, and dining areas will either be closed or see their services reduced.

According to Senate Sergeant at Arms Terry Gainer, his office will be reduced by about 500 employees, from 970 to the 240 deemed essential to the legislative process.

A skeleton crew of information technology workers will be kept on staff because of security implications and for protection from hackers. A small Capitol cleanup crew will also remain.

“This has a significant impact,” said Gainer of the looming shutdown.

Senior Pentagon officials are finalizing instructions to guide the Department of Defense through a shutdown.

Leaders of the military services said they are still trying to figure out exactly what a shutdown would mean and how they would implement one.

Defense officials said they are trying to get clarity on what positions are essential and nonessential. 

The Defense Department has “been through this many times before, so we’re not having to learn ... how to do this again,” Pentagon spokesman Geoff Morrell said. 

“We have a fundamental understanding of this. We can do this relatively quickly. It’s not without pain, but we are familiar with how to plan for this,” he said.

Asked if service members would not get paid during a shutdown, Morrell replied: “We’re not alone in that — that’s something that is potentially facing all government employees.”

An administration official on Wednesday’s call confirmed that the troops won’t be paid.

Service members will “continue to earn money during this period of time, but given that we don’t have any money to pay out, they will not be paid, they will not receive their paychecks, until we have money again and Congress appropriates,” the official said. 

Sen. Kay Bailey Hutchison (R-Texas) introduced legislation Wednesday that would require military personnel and supporting private-sector contractors to be paid during a federal work stoppage.

The Defense Department is expected to continue its operations in the Afghanistan and Iraq wars as well as Libya, and won’t stop its earthquake assistance to Japan.

Medicare and Social Security would remain mostly unaffected if lawmakers can’t reach a deal, the administration official on the call said. Officials are still finalizing plans for Social Security, but they didn’t expect the delivery of checks would be hampered. Medicare would receive “funding for a short period of time,“ but it would probably take months for Medicare to run out of funding.

The Small Business Administration won’t be able to approve loans, which “would have a significant impact on economic momentum,” and the Federal Housing Administration — which represents 30 percent of the mortgage market — wouldn’t be able to guarantee home loans during the peak home-buying season, which could affect the already fragile housing market, according to the administration.

Michael O’Brien, Debbie Siegelbaum, Bernie Becker and John T. Bennett contributed to this story.

This story was updated at 9:15 p.m.

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