Costs to Prepare for A #GovernmentShutdown

Today, I was amazed, flabbergasted, surprised, and amused when in a press conference, Senate Majority Leader Harry Reid  apologized to House Speaker John Boehner for hurting his feelings. He said Boehner said that’s the reason we have a government shutdown.

This afternoon, shots fired at the Capitol.  Is this frustration from a disgruntled federal employee?  Or someone directly or indirectly impacted from the shutdown of government services.  In the meantime, we wait with hopes that no one was injured or killed.  

We also watch as the Congress debates and we see no Progress in sight.  The richest nation in the world doesn’t have an approved budget to pay 800,000 workers or provide services to those in need.  Each week the government is closed the economy directly loses 1billion dollars that would go toward paying these employees.  Some economists estimate that can translate upwards of 10 times  when businesses are impacted. 

Today, DC streets are empty, highways from the suburbs during rush hour are like Sunday morning.   But what was the cost associated in the days leading up to October 1, 2013.  On that day, federal employees reported for four hours of work to change voicemail messages, lock up files and shutdown computers and printers. 

One federal employee working for an agency directly overseeing government agencies shutdown activities leading up to the shutdown shared some of the work they were involved in during the weeks leading up to the shutdown. 

They attended:

  • Weekly meetings with Politicals and General Counsel preparing for government-wide calls with agencies and various Councils (CFO, CAO, CIO, CHCOC, PMC), labor unions, and state government offices.  
  • Some Councils required separate calls (for various reasons– e.g., to review IT-specific policies with agency CIO shops, etc.) which required scheduling pre-meetings and meetings to discuss guidance, identify any anomalies prior to the call (researching regulations and policies for clarification), responding to emails, calls from leadership prior to the calls– then the gov-wide conference calls themselves.

There was daily work with teams across the agency to prepare and review draft guidance and FAQs for agency – budget, procurement, human resources, and IT shops.

  • Updating the agency’s internal guidance in draft, posting online.
  • Reviewing all agency contingency plans (before they were allowed to post on their intra/internets). Coordinating the primary agency conference calls and town hall with the Director.

When adding up the number of meetings, conference calls (some operator assisted — no telling how much that contract costs), government-wide calls with up to 200 Feds, plus all the salaries (of SES, political appointees, GS employees, etc.), staff staying up late to post shutdown guidance (and I’m talking past midnight), not to mention our daily work which we had to set aside, the costs are high.

So as the days led up to the #GovernmentShutdown it is hard to assess the cost associated with the shutdown.

  • We would have look at ongoing projects that were tabled and pushed aside.
  • The cost of shutting these projects down, in some cases flying people home.
  • And the cost of getting them going again and flying people back to the places they were.

We may never know the exact cost to shut the government down. We do know that it added work, hours and more importantly did nothing to advance the mission of our government agencies.

Congress continues debating the trivial matters of getting government restarted based on ideological differences.

So Now We Wait…..

How We Got Here: The Path to America’s 2013 Government Shutdown

The government is shutdown, and the world is watching how America treats its citizens in a battle of wills.  As Ezra Klein said, before the clock struck midnight starting the shutdown, “This is all about stopping a law that increases taxes on rich people and reduces subsidies to private insurers in Medicare in order to help low-income Americans buy health insurance. That’s it. That’s why the Republican Party might shut down the government and default on the debt.”

Below is info on the path to the shutdown.  Thank you to the budget expert with experience at the White House Budget Office and U.S. Senate for sharing information used below.

Here is what happened.

  • House and Senate have been fighting about the overall spending levels for months.
  • The Republican controlled House wanted the 2014 budget level at $967 billion for discretionary spending.
  • The Democratic controlled Senate wanted the level at $1,058 billion (to include a plan that replaces sequestration responsibly).
  • Democrats agreed to a level at $986 billion, which is the level of the continuing resolution (CR) that was under debate.
  • Democrats took the compromise even though it is below the desired level, thinking they would have a clean CR without any crazy ideological riders.

Fast forward to this past week.

  • The House passed a CR with a provision defunding the Affordable Care Act – (A law passed four years ago and a law tested by an election and the Supreme Court.)
  • The Senate voted against the CR
  • Senator Ted Cruz held his personal version of a filibuster.
  • The Senate voted, stripping out the ideological riders the House put in and sent a clean CR back to the House.
  • The House did not take up the Senate bill.
  • The House in turn attached more riders that are unacceptable to Senate Democrats.
  • The Senate voted and tabled those amendments, sending a third clean bill back to the House.
  • After more back-and-forth, the House asked to appoint conferees to work out an agreement and negotiate.
  • Leading up to this shutdown for six months, the Senate asked 18 times to appoint conferees for a budget conference.  Every time Republicans objected.
  • Not once has the House voted on a clean CR – which the Senate sent to the House.  Meanwhile, the Senate along with the President made it clear that anything other than a clean CR would not pass the Senate and if it was it would be vetoed by the President.

When the House declined to vote on a clean CR passed by the Senate before midnight Tuesday, the fiscal year ended.  Appropriations lapsed and the government shut down.

So now we wait!

What’s the Fuss About?

The Shutdown arrived at midnight. 

Republican House and Democratic Senate voted on a spending measure that continues to pay military service women and men.  But today, 800,000 federal workers went to work to change voicemails, turn off computers, printers and the lights on the government until Congress agrees on a budget or continuing resolution to keep the government running. 

Republicans and Democrats are far apart on agreeing to a budget or a continuing budget resolution to keep the government working.  Here is where we are.

What Republicans Want or Offer

  • Push ObamaCare “individual mandate” implementation to one year from now.
  • A conference committee between the Senate and the House to negotiate a budget.
  • Separate votes in the House to fund specific entities like veterans, the District of Columbia and veterans affairs.
  • End federally provided health care for the president, members of Congress and their staff while funding the government for 11 weeks.
  • Remove the tax on medical devices that is estimated to raise 30 billion over 10 years to help fund ObamaCare.
  • Anti-ObamaCare amendments.

Tea Party Wants

  • Total elimination of ObamaCare.
  • Not to negotiate with Democrats.

What Democrats Want

  • No Conference committee because they believe it will undermine ObamaCare
  • Keep the medical device tax that Republicans are against.  The tax is expected to provide over 30 billion dollars to help fund ObamaCare.
  • A clean budget that excludes any provision to defund ObamaCare

What We Know

  • 533 Congressional members in the House and Senate continue to be paid during the shutdown. (The 27th amendment prevents Congress from changing its pay.) 
  • The President continues to receive his salary because it is considered mandatory pay.
  • If shutdown goes to late October, disability and pension checks could stop for elderly and ill veterans.
  • 3.3 million injured military veterans could be affected.
  • The Federal Government is the nation’s largest employer.
  • Democrats and Republicans say a spending bill that doesn’t contain ObamaCare stands a good chance of passing with support from moderate Republicans and the Democratic minority.
  • Stock market hasn’t panicked yet.

What We Don’t Know

  • Perhaps the biggest thing we don’t know is, how long this will last.
  • The long term implications to the country’s economic growth.

What this means for the American economy? and how this will impact the World

  • America is the largest economy in the world.  America activity impacts world markets and economies.
  • The Government ran out of money on October 1.
  • It will default October 17th without an agreement, as the nation reaches its debt ceiling (credit limit).  
  • 800,000 federal employees furloughed equaling 1 billion dollars a week in salary.
  • The billion dollars is the pay that goes to federal employees.  That is money that helps drive the economy.  Brian Kessler, economist with Moody’s Analytics predicts, The economic impact could be 10 times greater than the simple calculation of wages lost by federal workers.  His firm estimates that a three to four week shutdown will cost the economy about $55 billion.

    That would mean that the economic impact from a month-long shutdown would be roughly equal to the combined disruption caused by Hurricane Katrina and Superstorm Sandy, not counting the property damage that accompanied those storms.

  • The Federal Reserve has been operating with low interest rates, the shutdown may mean raising interest rates.  This would be bad for both the American and global economies.