Shuttering the government actually costs more than keeping it open
WASHINGTON - Budget hawks in Congress may stand their ground on wasteful spending, but shutting down the government is no example of fiscal frugality.
Lost work, back pay and wiped-out jobs for federal contractors and other private-sector workers loom as just some of the costs of a closure that will happen in six days unless Democrats and Republicans in Congress break their impasse over abortion, military spending and other issues to pass a new budget.
The last time this happened, for 16 days in October 2013, the White House put a price on it: 6.6 million days of lost work, $2 billion in back pay for 850,000 federal employees who did no work and 120,000 private-sector jobs gone.
The effects, according to an accounting by the Office of Management and Budget and later by the Government Accountability Office, also added up to less effective government services as federal agencies spent much of their time ramping up for a closure before it happened, then recovering afterward from delays to their operations.
Closing the government has macroeconomic effects on economic output, and forecasters had varying estimates two years ago on how significant that was. Much clearer, though, were the direct costs to taxpayers.
The budget office concluded that the furloughs of roughly 40 percent of the civilian workforce - from the Defense Department to the Environmental Protection Agency - hit $2 billion, or $2.5 billion if you add in benefits.
The shutdown led to a total of 6.6 million days of lost work when employees were at home, many of them wanting to work but not even permitted to check their iPhones and BlackBerrys. Many federal contractors had to furlough employees as well and even fire some. And for the most part, those workers were not paid at all.
Other direct costs came from missed fees from national parks, interest due on late payments, missed revenue from tax enforcement and some stop-work orders, among other money that normally flows to government agencies.
The reports run through a lengthy list of disruptions in 2013. They include a backlog in veterans' disability claims, nearly 6,300 children left out of Head Start, patients left out of cancer studies at the National Institutes of Health, halted consumer-safety work, delays in tax refunds. The Food and Drug Administration delayed "nearly 500 food and feed domestic inspections and roughly 355 food safety inspections under state contracts," the budget office said.
The White House and auditors at GAO, the investigative arm of Congress, did not calculate the actual costs of closing federal agencies and then reopening them. But they described the general state of inefficiency and domino effect on customer services of a shutdown's three stages of planning, execution and reopening.
For example, auditors found that furloughed Health and Human Services employees, among many others, were eligible to apply for unemployment insurance during the shutdown. They turned to the Department of Labor, which administers the insurance program. It's different in each state.
After the shutdown, HHS had to figure out how to advise its employees to stop their applications or, in some cases, repay the insurance benefits since they received back pay. This took time.
At the Energy Department, the shutdown caused disruptions at nuclear storage sites, the budget office said, costing weeks of productivity. The National Nuclear Security Administration "devoted time and resources to placing nuclear weapons labs into safe standby condition, only to direct additional resources to restoring normal operations at these facilities days later," the report said.
Weeks of planning for the 2013 shutdown took resources from daily operations and services at HHS, Energy and the Department of Transportation, the three large agencies where auditors from GAO examined the shutdown's impact.
At the Energy Department's Office of Environmental Management, "officials estimated that budget, procurement, and management officials spent at least 50 percent of their time in September preparing for the shutdown," auditors wrote.
Managers were "consumed by work concerning the shutdown," they found, collecting information from each field office to estimate how long they could sustain operations with current funding, among other time-consuming minutiae.