U.S. government shutdown: Here’s how it could affect you, from food aid to getting your passport

By Robert Schroeder

Stocks have risen, not fallen, during four recent shutdowns

The U.S. federal government is barreling toward a partial shutdown Sunday morning, putting workers’ paychecks and environmental and food inspections at risk — but not, at least from a historical perspective, the stock market.

Stocks DJIA SPX COMP have gained in most recent shutdowns, as MarketWatch has reported. But a partial closure of the government would have many other disruptive effects, shuttering some federal offices, the U.S. Capitol Visitor’s Center and national parks around the U.S.

Social Security checks, meanwhile, would still go out and the Postal Service would still deliver mail.

As lawmakers on Capitol Hill wrangle over spending for the next fiscal year, here’s a look at what could close and what could stay open in the event of a partial shutdown, as well as other ways Americans might be affected.

Social Security and Medicare

Social Security and Medicare benefits would continue to be issued in a shutdown, although, as MarketWatch has reported, the Social Security Administration’s daily work, like benefit verifications and earnings-record updates, would grind to a halt.

Retirement Weekly: What a government shutdown would do to Social Security payments — and what you really should be worried about

The stock market has historically risen. IPOs would freeze

Investors may not be hurt by a shutdown. As MarketWatch has reported, there have been six government shutdowns since 1978 that lasted five days or more, and the S&P 500 index gained in the four most recent.

Companies looking to go public, however, would have to wait. Securities and Exchange Commission Chair Gary Gensler said during a hearing before the House Financial Services Committee Wednesday that a government shutdown would force his agency to furlough roughly 93% of its staff, leaving him with a skeleton crew that would not be able to perform basic market oversight.

“I would say if a company were deciding to go public or raise offerings, they’d want to go effective before Friday if they’re ready to,” Gensler said.

Passports

You can plan on applying for a passport during a shutdown, according to State Department guidance.

“At this time, scheduled passport and visas services in the United States and at U.S.Embassies and Consulates overseas will continue during the lapse in appropriations as the situation permits,” the guidance said.

But the State Department could suspend passport services done in buildings run by temporarily shuttered agencies, as the Washington Post noted.

National parks

The Interior Department says the majority of national parks will be “closed completely to public access.”

“At [National Park Service] sites across the country, gates will be locked, visitor centers will be closed, and thousands of park rangers will be furloughed. Accordingly, the public will be encouraged not to visit sites” during a shutdown, the department said.

National parks suffered during the 35-day shutdown in December 2018 and January 2019. Many parks remained open but went unstaffed, and conservationists warned at the time that sensitive lands could take decades to recover from damage. Smithsonian museums and the National Zoo in Washington were closed as well.

Federal-worker furloughs

Some federal workers deemed essential would stay on the job, but hundreds of thousands of others would be furloughed without pay. Those who are furloughed or required to work during a shutdown are guaranteed to get paid once funding resumes.

Workers considered essential include military personnel, prison guards and border-security agents.

Airline disruptions are also possible in the event of a shutdown, Transportation Secretary Pete Buttigieg has warned. He told CNN that air-traffic control training would cease, controllers who would work would not be paid and a federal effort at rulemaking for passenger refunds would grind to a halt.

Government data

The economic data released by the U.S. government that investors pore over could also be delayed, depending on the length of a shutdown. For example, a reading on gross domestic product came out a month later than usual, in February 2019, due to that year’s shutdown.

Federal Reserve Chair Jerome Powell acknowledged the possibility of data reporting being affected.

“If there is a government shutdown, and it lasts through the next meeting, then it’s possible we wouldn’t be getting some of the data that we would ordinarily get and we would just have to deal with that,” he told reporters at a news conference on Sept. 20. The next Fed meeting is set for Oct. 31-Nov. 1.

Government-backed mortgages

Americans applying for government-backed mortgages may face unexpected delays in the event of a partial shutdown, as MarketWatch reported. When the government shuts down, federal agencies work with limited staffing, which means fewer applications get processed.

Read: Government shutdown could leave thousands of federally backed mortgages in limbo

Food aid and inspections

Some 7 million mothers and children would lose government benefits to buy food if the federal government shuts down, Agriculture Secretary Tom Vilsack said Monday. Benefits for participants in the Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, would be stopped, Vilsack said at a press briefing.

Food and environmental inspections could also be halted. During a shutdown in 2013, the Environmental Protection Agency stopped inspections at 1,200 different sites for things like hazardous waste and drinking water, according to the nonpartisan Committee for a Responsible Federal Budget.

U.S. Postal Service

In the event of a shutdown, Americans would still receive cards, letters and packages through the mail. The U.S. Postal Service is an independent body that’s funded by selling its products and services, not by tax dollars.

Read next: The government shutdown is ending, after becoming the longest on record — by a wide margin

-Robert Schroeder

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09-29-23 1239ET

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