What Would a Government Shutdown Mean for You?

September 30th was the last day for Congress to fund the government. Thankfully, a last-minute agreement was passed by the House and Senate before it expired, funding the government through November 17th. This narrowly avoided a government shutdown. But, what happens when November 17th comes? And how would it affect you, as a pre-retiree or retiree? What should you do in order to prepare? Today, we’ll discuss what a government shutdown is, and answer some frequently asked questions about it.

Firstly, it’s important to understand what a government shutdown is: A shutdown refers to when the government fails to pass a budget or spending bill to fund government operations. The result is that many government services and functions are temporarily disrupted. Additionally, a shutdown affects government employees and contractors and can harm the economy.

Shutdowns are usually the result of a budgetary impasse or a failure to reach an agreement on government funding between the legislative and executive branches. Shutdowns have occurred periodically when there has been a failure to pass federal budgets or funding bills, like what we narrowly avoided last month.

Prior Government Shutdowns

Since Congress introduced the modern budget process in 1976, there have been a total of 20 “funding gaps,” during which funds were not appropriated for at least one day. However, prior to 1980, the government did not actually shut down. Rather, they continued normal operations through these funding gaps. Since 1981, ten funding gaps of three days or fewer have occurred. However, during these gaps, government operations were affected only minimally.

There have now been a total of 4 “true” shutdowns so far, in which operations were affected for more than only one business day. The first two each lasted 26 days, and happened during the winter of 1995 to 1996. The third was in 2013, lasting 16 days. The fourth shutdown in the winter of 2018 and 2019 was the longest so far, lasting 35 days.

Frequently Asked Questions

How is a government shutdown likely to personally affect you? Well, obviously, that varies depending on your situation. Here are answers to some frequently asked questions, that may help you gain a better understanding of what you should expect from a shutdown. Some things that we can assure you will stay mostly unaffected include:

What Most Likely Will Not Be Affected?

Would a government shutdown affect when I receive my Social Security?
No, it would not. A government shutdown would not impact Social Security’s funding. However, in the event of a shutdown, some Social Security Administration employees would be furloughed, meaning their customer service could potentially be impacted.

Would you still receive your mail?
Yes, you would still get your mail. The U.S. postal service would be completely unaffected in the event of a government shutdown.

Would Medicare and Medicaid benefits be affected?
Current Medicare, Medicaid, and disability insurance beneficiaries would continue to receive their benefits.

Would military and federal retiree benefits be suspended?
Rest assured, military and federal retirees would continue receiving retirement benefits. Processing new applications or other requested changes would, however, be delayed.

How would a shutdown impact state and local services?
A federal government shutdown would not immediately affect any state/local services. However, some state or local governments may change their operations with federal funding cut off. You’ll have to check with your own state and local agencies for specific questions.

What Will Be Negatively Affected?

How would this affect environmental protection and cleanup?
The EPA would stop inspecting most hazardous waste sites, as well as drinking water and chemical facilities. Efforts to address dangerous contaminants linked to adverse health effects would also be delayed.

Would air travel be affected?
Air traffic controllers, TSA officers, and Customs and Border Protection agents would remain on the job, but without pay. Although, if some do not report to work (which has happened during the previous shutdowns) there would be significant delays across the country.

What would this mean for disaster relief efforts?
FEMA staff would still respond to emergencies. Long-term projects, however, would be delayed due to a lack of funding for the Disaster Relief Fund.

What would this mean for medical research?
The National Institutes of Health would be forced to delay new clinical trials. Furthermore, new patients waiting for a chance at new treatment through a clinical trial would be turned away.

What would be the impact on food assistance?
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) would quickly run out of funding, and be unable to provide food for children and parents in need.

What is the effect on housing?
The Federal Housing Administration (FHA) would stop insuring some new mortgages. Furthermore, the Department of Housing and Urban Development (HUD) would stop processing some new loans. Funding for federal housing assistance programs, such as Housing Choice Vouchers, may be jeopardized during a prolonged shutdown.

We Can Help

A fixed indexed annuity (or FIA) offers a source of income that can last you your entire life, and isn’t affected in the event of a government shutdown. And right now, one of our annuity products is offering a 40% bonus. That means that for every $100K added to your annuity, an additional $40K would be added to your income and death benefits. This is the best offer we’ve ever seen on one of these products. Reach out to us to learn more.

Source: Debbie Dingell

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