Friday, July 29, 2011

Will I get paid if the federal government shuts down on August 2, 2011?

Just like last April, a federal government shutdown deadline is rapidly approaching. With only 4 days to go, Americans all over the country are wondering what will happen on August 2, 2011. Will social security recipients, military personal, medicare bills, etc. get paid? What will be open?

To help answer these questions, we've examined a number of stories that listed the federal services that will be affected. While there is no absolute answer to these questions, (because much is at the discretion of the President and Treasury Secretary), the summary below offers a brief overview of what will be open and who may be paid.
  • Congress, Senate, President:  Yes
  • Federal employees: There are about 1.9 million civilian government workers. Of those, approximately 1/2 will remain on the job and the other half will be furloughed. Those who are not deemed as essential will not work and will not be paid. Unless Congress passes a new provision, these people are not entitled to receive back pay when  they return back to work. It is unclear if they will be entitled to unemployment insurance either.
  • Social Security & Disability: The Social Security Trust Fund contains sufficient monies to provide continuous payments to those recipients. While there is little or actual money in the fund, it holds a numerous US Treasury bonds. Some of these may have to be sold or redeemed in order to cover the checks that will be written. However, because the agency may have limited staff, new claims may be delayed.
  • Medicare: Like social security, medicare claims will continue to be paid. However, there may be a delay in the actual payments and new claims may be deferred as well.
  • Veterans: Yes. The Veterans Administration receives yearly funds in advance. This means that money for all services has already been provided.
  • Military: Everyone will continue to work, whether they are uniformed personnel or not. However, many will not be paid until the shutdown is ended. Others may only receive 1/2 pay during the shutdown, but the remainder of the money will be paid afterward as well.
  • Mail delivery: The USPS is a separate self funded entity and will not be affected by a shutdown.
  • Security: All aspects of national security are considered critical functions and all services will continue. This includes Homeland Security, Coast Guard, border patrol, jails, courts, food inspection programs, etc.
  • National Parks: Unfortunately, this will be the first to go. Parks, zoos, and museums will all be closed to the public.
  • Passports: Another inconvenience. If you are applying for a passport, you will probably have to wait unless it is an absolute emergency.
  • IRS: Collection of taxes will remain in operation, but will experience a staff reduction.
  • SBA & FHA: Both the Small Business Administration and Federal Housing Association will suspend approvals during a shutdown.
You can learn more by reading the articles written before the anticipated April shutdown.

Government shutdown: What it means for you
Who gets paid in a shutdown? Congress!
Government shutdown 2011: Will I get paid? What will be open? What can I expect?

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