Showdown over Shutdown? How Gov’t Shutdown will Affect Federal Agencies, Contractors

As negotiations over a stopgap spending measure have been put on hold because of a Senate recess, the federal government readies itself for a possible early March deep freeze, otherwise known as a government shutdown.

Congress has until March 4 to pass an extension of the current continuing resolution. The House has already done so. But, extending the stopgap measure, which caps spending at the previous year’s level, would result in about $61 billion in cuts, politically untenable for some lawmakers.

Earlier this week, the White House indicated it was prepared for a shutdown.

“I’d simply state that there have been contingency plans for government shutdowns since 1980, and those plans are obviously updated accordingly, but they’ve been around for a long time,” said press secretary Jay Carney, according to Federal News Radio.

The Office of Management and Budget issues guidance every year to agencies to prepare for a possible shutdown, or what OMB calls a “funding hiatus.”

In the event of a shutdown, only essential federal personnel will report to work. Museums and national parks will be closed, Social Security applications will not be processed and toxic waste clean-up will halt, according to The Washington Post.

Those federal employees who are out of work temporarily will eventually be paid, but CNNMoney reported “contractors won’t be so lucky.”

Alan Chvotkin, executive vice president and counsel for industry group the Professional Services Council, said “a shutdown would tear into service contractors’ pocketbooks,” because often services aren’t paid for in full by the government as soon as the deal is inked but spread out.