Business World

Sunday 30 April 2017

Congress threatens to turn off federal pay tap

Senate Majority Leader Harry Reid, a Democrat from Nevada, left, and House Speaker John Boehner, a Republican from Ohio, speak to reporters outside of the White House following a meeting with President Barack Obama
Senate Majority Leader Harry Reid, a Democrat from Nevada, left, and House Speaker John Boehner, a Republican from Ohio, speak to reporters outside of the White House following a meeting with President Barack Obama

James Rowley

As Democratic and Republican leaders in the US Congress seek agreement on a spending measure for the rest of the 2011 fiscal year, the Obama administration has warned of economic disruption from even a short shutdown.

More than 800,000 "non-essential" federal workers -- out of a civilian workforce of 2.1 million -- would be put on unpaid leave until new spending legislation was passed.

Agencies have drafted contingency plans for who would work and who wouldn't.

In the event of a US government shutdown, the national institutes of health won't admit new patients, some taxpayers will wait longer for refunds, and civil servants on leave with federally issued BlackBerrys must turn them off.

A failure by the US Congress to extend the government's spending authority, which expires today, would force the closure of national parks, monuments and museums.

Federal agencies -- such as the labour relations board -- that don't protect lives, property or national security also would be shuttered.

The prospect of a government shutdown, however limited, has placed pressure on the Obama administration and congressional leaders to settle their dispute over $30bn (€20bn) or more in cuts from the federal budget through September before a suspension -- as of midnight tonight -- of all but essential federal services.

Leaders of both parties are bracing for the blame that will be attached to their failure to resolve what the White House has described as minimal differences.

"People are going to have to understand that a shutdown would have real effects on everyday Americans," US President Barack Obama said after a meeting with congressional leaders at the White House, where he expressed confidence that a shutdown can be averted.

Elected officials, including members of Congress and the president, would get paid during a shutdown unless Congress changes the law.

Unlike the president and legislators, though, military personnel and federal employees who are deemed "essential" would receive no paychecks.

Although troops and the civilian employees who continue to work would get paid for their service after government financing is restored, there is no guarantee that Congress would make good on back pay.

The cost of back pay for furloughed government workers would be $174m for each day the government is closed, according to data compiled by Bloomberg government analyst Scott Anchin. (Bloomberg)

Irish Independent

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