As Congress appeared increasingly unlikely to pass a stopgap funding bill this week, residents and state officials braced for the impact of a potential shutdown of federal government operations in Connecticut.
Congress has until Saturday to pass a continuing resolution to avert a partial shutdown of the U.S. government. As of Thursday, lawmakers remained divided as the Senate worked to approve a bipartisan bill while the Republican-controlled House stuck to a more divisive package, according to Reuters.
Asked Wednesday to assess the impact of a shutdown on the state, Gov. Ned Lamont told CTNewsJunkie that, while there would be no immediate consequences for Connecticut, a long shutdown could cause serious problems like federal employees forgoing pay. Lamont said he was frustrated by congressional inaction on the issue.
“That’s your job in Congress,” he said. “You had an agreement, you said what the budgets were going to be – this goes back to the debt ceiling. Honor the commitment you made and give folks here in the great state of Connecticut some certainty that you’re getting your act together, that the services you’re supposed to be providing are going to continue to be provided. People want some certainty – that’s everywhere from big business to local taxpayers.”
Pay for federal workers
Connecticut is home to nearly 6,000 active duty military members, according to 2020 statistics from the Defence Manpower Data Center, and 8,459 civilian federal workers, according to statistics from the Office of Personnel Management.
While all employees will eventually be compensated, the shutdown will result in workers forgoing pay until the government is funded again. Some essential employees will be required to continue working during that period while others will be furloughed.
In a statement Wednesday, U.S. Sen. Richard Blumenthal said the impact of a prolonged shutdown could be “deep and devastating” for Connecticut, in part due to federal workers like military members and air safety personnel going without pay.
“We need to reach a reasonable compromise to move forward with a spending measure and avoid a shutdown, but the far right extremists in the House of Representative have exercised a stranglehold over the process,” Blumenthal said. “I am working to reach across the aisle to avert a deeply harmful situation that will have real consequences on Connecticut workers and our economy.”
The White House has warned that a shutdown could cause significant travel delays as Transportation Security Administration and Federal Aviation Administration personnel will be forced to work without pay and the training of new air traffic controllers will be put on hold until government funding is resumed. There are currently 271 TSA officers and 39 air traffic controllers in Connecticut, according to the White House.
Benefits at risk
Payment of some benefits like Social Security, Medicaid, Medicare, and unemployment will be unaffected by a shutdown. So will the delivery of mail through the U.S. Postal Service and payments under the Supplemental Nutrition Assistance Program.
However, depending on how long a shutdown persists, funding for government assistance programs for vulnerable residents may run out.
For instance, more than 47,000 Connecticut residents receive food assistance benefits under the Special Supplemental Nutrition Program for Women, Infants, and Children program. That includes more than 25,600 children and 11,600 infants, according to statistics from the White House.
In a statement this week, U.S. Rep. Rosa DeLauro, a Democrat who represents Connecticut’s 3rd District and serves as ranking member on the House Appropriations Committee, urged House Republican leaders to adopt the Senate’s stopgap funding bill, which includes funding for disaster relief and support for Ukraine.
“If House Republicans are serious about finishing final full-year bills, they need to vote for this bipartisan continuing resolution so we can get to work right away,” DeLauro said.
Delays in loan processing
A prolonged shutdown may also impede homebuyers seeking approval from the U.S. Department of Housing and Urban Development as well as the Veterans Affairs Department for new FHA and VA loans or those looking to the agencies for help with equity conversions and reverse mortgages.
In a frequently asked questions document, posted to HUD’s website, the agency said that while a brief shutdown would not have a significant impact on the housing market, a longer shutdown may be disruptive.
“FHA will have limited staff during a shutdown and the processing or closing of FHA-insured loans may be delayed,” the agency said. “The longer the shutdown lasts, the more serious the impact will be.”
Meanwhile, a shutdown is likely to damage the U.S. economy. A 2019 report from the Congressional Budget Office estimated that a partial shutdown between December of 2018 and January of 2019 reduced the Gross Domestic Product by about $3 billion that would not be recovered in subsequent calendar years.