Director of the Office of Management and Budget Mick Mulvaney speaks with reporters outside the White House about a possible government shutdown. | Evan Vucci/AP Photo Shutdown threatens a 'gut punch' as agencies brace for closure Agencies are dusting off contingency plans as they scramble to deal with a sudden escalation into spending crisis.

Federal agencies are bracing for a shutdown amid growing uncertainty about whether the Senate will vote to keep the government open past midnight.

Unlike the last federal closure in 2013, which President Barack Obama had signaled for weeks, this threat arrived abruptly.


Thursday morning, President Donald Trump fired off a hot-tempered tweet to Congress condemning a short-term deal to fund children’s health insurance. By afternoon, federal agencies were issuing legal guidance, briefing staff on the definition of “essential” personnel, and dusting off their contingency plans. Thursday night, the Office of Management and Budget began releasing legal guidance to agencies.

By Friday morning, preparations were moving ahead. “The bottom line is we’re working to make sure there is no shutdown,” OMB Chief Mick Mulvaney said, “but if the Senate or the House can’t get together to finalize a deal we’ll be ready.”

As the likelihood of an impasse grew on Friday afternoon, some agencies said they would just ignore any shutdown and keep running for as long as they could on what funds they had.

Still, with such a short window to prepare, agencies were scrambling. In an 11 a.m. phone call with union leaders, officials from the Office of Management and Budget and Office of Personnel Management couldn’t answer even basic questions, such as how federal employees will be told that they're “essential” and need to report to work, said J. David Cox, president of the American Federation of Government Employees.

“I’ve never seen such a disorderly, chaotic government shutdown,” Cox told POLITICO. “I’ve been through several shutdowns and I’ve never been through one this weird, this crazy.”

The city has been brought to the brink before, but rarely — and maybe never — with so little warning.

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The 16-day closure of 2013, one of the government’s longest, arrived after a slow windup from the Obama administration, which used the threat of a shutdown to score political points with the public, squarely blaming Republicans and warning federal employees what was coming. When the shutdown did arrive, parks were shuttered and the National Zoo's popular panda cam went dark. Obama’s political calculus paid off; Republicans took most of the heat.

That year, more than 850,000 federal employees — nearly 40 percent of the full-time federal workforce — were left without work and pay. Unemployment claims surged, consumer confidence tanked, and the work stoppage shaved 0.3 percentage points from economic growth, according to the Congressional Research Service.

While Congress has made federal workers whole after past furloughs, retroactive pay isn’t guaranteed. On average, full-time federal employees earn $82,700, according to OPM, but hundreds of thousands earn much less.

“Half a million federal employees make less than $50,000 a year, they’re living paycheck to paycheck,” said Joyce Warner, executive director of the Federal Employee Education and Assistance Fund. “This can reverberate and cause people long-term financial anxiety. It doesn’t take much to throw people under the bus financially.”

The fund, a nonprofit that provides interest-free loans to needy government employees, stopped offering furlough aid after the 2013 shutdown, when it was overwhelmed with requests.

Only 15 percent of the federal full-time permanent workforce is based in the Washington area, meaning the effects of a shutdown will reverberate across the country. Six million small businesses might temporarily lose access to financial aid and applications for new Social Security benefits could be delayed.

And a prolonged closure could wind up costing taxpayers money. In 2013, agencies had to pay higher costs to contractors for more than 10,000 stop-work orders and the National Park Service lost $7 million in user fees and other revenue.

Interior Secretary Ryan Zinke tweeted that his department would aim to keep public lands “as accessible as safely possible under the law” during a shutdown. Spokeswoman Heather Swift said areas that can stay open with limited support should, while lands that need snow removal or regular maintenance would close.

At the Environmental Protection Agency, nearly 95 percent of workers will be furloughed, according to the agency's contingency plan, which was updated in December. But on Friday afternoon, EPA Administrator Scott Pruitt said the agency would stay open and told staff to report to work Monday morning.

"EPA has sufficient resources to remain open for a limited amount of time in the event of a government shutdown," Pruitt wrote in a memo to staff. "Should the shutdown occur and remain in place through January 26, 2018, we will provide further updates." Pruitt is expected to visit Japan next week.

The timing couldn’t be worse for the Internal Revenue Service, which has just begun work to implement the new tax law and preparing for the start of tax-filing season. Beset by steady drops in staff and funding over the better part of a decade, the IRS already deals with operational challenges on a daily basis.

The agency’s shutdown plan assumes it isn’t handling tax returns and deems only 13 percent of employees essential enough to stay on the job. Phone calls from taxpayers and tax professionals would go unanswered.

A shutdown would deliver "a gut punch" to the already strained agency, National Treasury Employees Union President Tony Reardon said in a statement. “Those most harmed in this scenario would be the American taxpayer, businesses, and the tax preparer community.”

At the Pentagon, troops will report to duty as usual but won’t get paid — including those serving in combat zones. Congress could step in to keep some salaries flowing, which it did in 2013. But death benefits won’t be paid to families whose loved ones lose their lives, Pentagon budget chief David Norquist said, something that prompted a dramatic backlash in 2013.

U.S. trade talks scheduled to begin Sunday in Montreal, Canada, will proceed as planned, the Office of the U.S. Trade Representative said today. While USTR will send a full delegation to Montreal, other agencies that typically participate in negotiations, including the Treasury, Commerce and Agriculture departments, could limit or cancel their delegations.

At the Homeland Security Department, workers were sent standard guidance and told that non-essential employees could come in for up to four hours on Monday to wind down business in the event of a closure that lasts beyond the weekend. Prior to that, one department official said the workforce had gotten “zero guidance” about how to handle a shutdown beyond turning in timesheets early.

The U.S. Citizenship and Immigration Services, which is almost entirely funded by user fees, will mostly continue its work without interruption, as will U.S. Customs and Border Protection. But the E-Verify program, which businesses use to check the work authorization of employees, will cease operating.

Like the EPA, the Federal Communications Commission and Nuclear Regulatory Commission have enough money to keep running for about seven business days. The federal Judiciary, including the Supreme Court, district courts, and bankruptcy courts, will be open Monday and should be able to operate on court fees and other funds through Feb. 9.

Businesses will have their own headaches. Government vendors could lose revenue and the regulatory process will grind to a halt. An expected lawsuit over the Federal Communication Commission’s repeal of net neutrality rules can’t begin until the regulation is actually published in the Federal Register.

The Food and Drug Administration, which oversees about 80 percent of the food supply, would keep about half of its workforce on the job but routine inspections would stop. When the government closed in 2013, food safety advocates raised concerns about staffing at FDA and the Centers for Disease Control and Prevention, which tracks outbreaks of foodborne illness.

Some financial regulators can continue operating during a brief shutdown. The Federal Reserve, Office of Comptroller of the Currency, Federal Deposit Insurance Corp. and Securities and Exchange Commission can stay open during a brief closure. Even during a prolonged shutdown, the SEC's EDGAR filing system will continue running. As for enforcement, only litigation that cannot be deferred can proceed.

Unlike the SEC or FDIC, funding of the Commodity Futures Trading Commission depends on Congress; the agency would need to furlough most of its workers.

Localities expecting project funding will see delays, which could be significant if a shutdown stretches into weeks. In 2013, some states canceled projects because of the funding uncertainty. And some 1,200 school districts relying on $1.3 billion annually in federal aid already are dealing with financial uncertainty because the government has been funded through stopgap measures since last year.

Problems are unlikely if a shutdown lasts a couple days or a week, but could be detrimental if it drags out. In 2013, some school districts had to borrow from local banks to keep operating. Tens of thousands of Head Start spots were jeopardized, military academies were forced to stand down, federal technical assistance ground to a halt and shuttered Smithsonian museums endangered field trips.

A shutdown, if it comes, will be less disruptive at airports, where air traffic controllers and baggage screeners are considered essential employees. They’ll remain on the job, although without pay.

With reporting by Nancy Cook, Ian Kullgren, Alex Guillen, Aaron Lorenzo, Jacqueline Klimas, Kathryn Wolf, Eric Geller, Helena Bottemiller Evich, Darius Dixon, Anthony Adragna, Megan Cassella, Caitlin Emma, Matt Daily, Patrick Temple-West, Rachana Pradhan, Victoria Guida and Josh Gerstein.