Life’s important questions, like:  “What happens when the government shuts down?”

A person stopped me on the street the other day and asked, “Terry, what’s the meaning of life?”  I told them, “I do not know.”  Shortly thereafter, another person stopped me and asked. “Terry, Is there an afterlife?”  I told them, “I don’t know, maybe ask me when I’m dead.”  Finally, a third person stopped me and asked, “What happens when the government shuts down?”   I told them, “That, my friend, is something I know about.”

There are many mysterious questions in life and one of the ones I get asked the most these days from perplexed people is about the government shutdown.  There’s much existential dread about the shutdown — as there should be.  Days and weeks pass and the implications of the shutdown grow.  We all should be concerned about where this shutdown is heading.

I ran a federal agency during the 16-day shutdown of 2013.  Those were 16 lonesome days consisting of checking the news on the shutdown, building a deck in my backyard, and becoming familiar with the concept of “binge-watching.”

If you have a federal loan, a grant, or plan to apply for funds, the shutdown can be a problem. While there are many resources on-line about the shutdown to tell you what this all means, I will attempt to put my insider-take (with some humor) on what really happens in hopes that it helps you cope.

“Are all the Federal Agencies really shut-down?  Surely there is someone over there watching the shop, right?”

Those agencies in the business of keeping the nation safe and secure are pretty much open but only for that purpose.  Social Security, Medicare, Medicaid, and the IRS are all performing their basic financial functions.  The Treasury Department will make sure regularly-scheduled checks go out.  If you are awaiting a federal check that needs approval from a human, it’s likely not going to happen.  All agencies have put non-essential staff on leave.  That can be a significant number of people. For instance, when I worked at USDA we had an agency of 5,000 people.  All but a dozen stayed home during the shutdown.

“But furloughed federal employees could check their email, voicemail, and work from home, right?

No, they cannot.  It’s a firing offense to conduct non-essential federal business during a closure.  Employees caught working or stopping by the office are told they can be dismissed if they try to do so.  Don’t expect them to return your calls or letters.

“So, what happens to my reimbursement currently being processed by the feds or my grant application?”

All of that is presumably on hold.  One of the awful consequences of a shutdown is the amount of work that is piling up on federal agencies and their staff.  Payments will be delayed, grant deadlines will pass, rulings won won’t happen, etc. . . There’s no harm in calling the federal agency to check if they are around (certainly if there are emergency circumstances), but it’s likely that they are not there.

“We have a federal loan for our community facility.  Do we need to continue to make payments?”

Absolutely!  During the shutdown, the federal government will gladly accept any money you send them.  You can be 100% certain Tax Day won’t be pushed back.  But if you are making a request for the federal government to actually send youmoney, well, that would just be irrational if not downright unprecedented!

“What happens with our grant application deadline?  Is it pushed back?”

Proceed as you regularly would. is still accepting applications.  The shutdown will affect when your grant gets reviewed and awarded. It’s particularly bad timing for a shutdown because many grants are regularly noticed in the spring.  The shutdown will push those programs back. But that does not mean the programs won’t ever happen; it will likely mean the eventual timelines at the end of the fiscal year will be shortened.

Here’s a likely scenario: The government re-opens February 1st.  The regularly scheduled March 30 deadline for HUD’s grant program to provide subsidies for Housing and Apartments Containing Kittens (Commonly known as “HACK”) may be pushed back to August because of a shutdown.  The normal 4-week application acceptance period might be shortened to 2-weeks.  Awards that are normally made in August could be pushed back to October.  The upside for savvy applicants with well-prepared applications is that deadline adjustments typically reduce the size of the competitive pool of applicants.

“If this drags on what will happen to federal programs?”

Many agencies have reserve accounts for various programs.  The longer the shutdown lasts, the more those emergency funds will run out. We see this with the USDA’s SNAP program (aka Food Stamps).  That account is expected to run dry by the end of January.  The longer this goes on, the more dramatic the consequences. Forest Service funds for fighting wildfires are at risk and their planning for the Spring season has already been disrupted. Thousands of New Mexico families receive apartment rental assistance through the USDA.  The Government helps reduce their rents by as much at 90%.  Those rents will presumably go up dramatically if funds run out and the feds can’t subsidize.  But don’t be afraid, those programs are preventing just 3 of the 4 Horsemen of the Apocalypse.

“Why is this happening????”

Singing the “I’m just a bill” song from the Schoolhouse Rock cartoon is one way to explain it, or you can explain it like this:  The Congress failed to pass their spending bills to fund fiscal year 2019 before fiscal year 2018 ended.  Only Congress has the “power of the purse” to put money in the country’s bank account for this year and they haven’t.  Some of us Capitol Hill old-timers remember way back in the 20thcentury when Appropriators passed their spending bills through the Congress and sent them to the President months before the end of the fiscal year. But those days seem to have gone the way of the VCR, the cordless phone, and Y2K.

“Where do we go from here?”

The Congress needs to pass a spending bill the President will sign.  That requires a concept built into the constitution and regularly practiced in our country for about 2 ½ centuries that was called “compromise”  (yes, that’s snarky).   Negotiations will continue and the pressure will heat up on all parties to re-open the government.  It’s that pesky requirement that all parties agree to a spending bill that the President is using to force Congress to deal to him.  You might say he’s using that as his “Trump Card.”

Any more questions, please send them my way: