Government shutdown looms as federal budget talks stall

The Associated PressApril 6, 2011 

  • Government spending authority runs out Friday. If no agreement is reached on providing new funding for the rest of the fiscal year, through Sept. 30, many federal activities are expected to begin shutting down Saturday, such as museums, monuments and national parks.

    Obama and his aides refused again to give specifics of their contingency plans for a shutdown. In the past, hundreds of thousands of "nonessential workers" across the country have been told not to report to federal work during budget shutdowns, while others deemed essential did go to work. So far, the Obama administration isn't saying which workers will be told to stay home and what federal functions won't be performed.

— Warning of economic repercussions, the Obama administration said Wednesday that a government shutdown would halt the processing of tax returns and limit small business loans and government-guaranteed mortgages during peak home buying season.

The administration described shutdown planning as congressional negotiators continued to work to strike a deal that sets spending limits through the end of September. Negotiators have until Friday to reach an agreement before triggering a shutdown.

President Obama cautioned congressional leaders Tuesday that he would have them back at the White House Wednesday if they didn't make progress. Obama did call House Speaker John Boehner Wednesday morning. Boehner's office said the call lasted just three minutes and that the speaker told Obama he was hopeful a deal could be reached.

Obama left in the early afternoon for events in Philadelphia and New York. He boarded his Marine One helicopter at the White House with no comment, just a friendly wave to supporters

Under the shutdown scenario described by the administration, the government would have to significantly cut staffing across the executive branch, including workers at the White House and civilian employees at the Defense Department; somewhere in the vicinity of 800,000 workers will be affected. Congress and the judiciary branch will also be subject to a shutdown.

The Federal Housing Administration, which guarantees about 30 percent of home mortgages, would stop guaranteeing loans. The issuance of government backed loans to small businesses would be suspended. And processing of tax refunds would halt for those who filed paper forms. Then again, so would tax audits.

Social Security and Medicare beneficiaries would continue to receive benefits. And taxpayers who file electronically will see no delay in processing of their returns.

Among other consequences cited by the administration:

-The Environmental Protection Agency would cease issuing permits and stop reviewing environmental impact statements which will slow approval of projects.

- Military personnel would not get paid beyond Friday, but would continue to earn money that would be paid to them once the government resumes.

- National parks would be closed.

- Most government websites would not be updated, unless they were deemed essential

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