The government shutdown: An exercise in stupidity
As I sat eating breakfast at a local restaurant, I overheard a gentleman in a nearby booth utter: “Well, the government’s been closed for almost two weeks and I can’t tell the difference.” As a former federal employee who spent more than two decades in mankind’s largest bureaucracy, I thought I might share exactly what a shutdown looks like from inside the belly of the beast.
First, a week or so prior to a shutdown, federal bureaucrats making six-figure salaries start developing a plan for how their agency will deal with it. Each agency works decides which employees are “essential” and which ones aren’t. If you’re deemed essential, that means you have to work during the shutdown without getting a paycheck until the shutdown ends. If you’re deemed non-essential, you put a big smile on your face because you get furloughed and, therefore, get to spend the shutdown eating Cheetos and watching Dr. Phil until the President and Congress can get their acts together.
The truth is the term “shutdown” is terribly misleading. The government never really shuts down. In reality, only about 40 percent of it stops working. There are approximately 2.7 million federal civilian employees (that includes the postal service) and in each shutdown since 1996, only about 800,000 of those employees actually get furloughed. By the way, despite all his promises to drain the swamp, the size of the federal workforce in 2016 was 2.7 million and it’s the same size today.
The next step is for government contracting officers to spend day after day writing letters to every federal contractor ordering them to “stop work” as soon as the government shutdown begins. At any given moment there are hundreds of thousands of contractors, from janitorial and landscaping workers to engineers and scientists working for the government who aren’t federal employees. Also included are businesses with contracts to repair boilers, re-shingle a roof, pave roads, etc. The federal government shells out over $500 billion dollars each year on contract spending. The instant the government shut’s down, all of these cooks, janitors, plumbers, electricians, carpenters, etc. are sent home and their paychecks stop coming as well. Now, here’s where the real stupidity begins.
Small businesses loans stop being processed, research grants are delayed, and federal contracts are halted or postponed. Even though employees of those firms that contract with the federal government won’t be furloughed the same way that federal employees are, they will be sent home because their contracts are temporarily on hold. And those contractors will ultimately get paid or get an equitable adjustment when the shutdown ends. Every one of those contractors, because they have a firm-fixed price, guaranteed contract can, and will, apply for a contract change order and file a claim for damages.
So, let’s say you’re a roofing contractor who has a 4-person crew (with each roofer making $46 per hour because that rate is set by federal law) replacing a roof at federal facility. You tarp the unfinished roof and you and your crew leave the facility.
If the government is shut down for 10 days, you simply submit a request for a change order to increase the contract dollar amount by $5,720 dollars because your work was interrupted, and your crew was delayed by the government for 10 days. The government will cut you a check for damages. The 2013 shutdown cost hundreds of millions of dollars for the Pentagon, and billions government-wide in terms of legal disputes over contracts, procurement delays and downstream litigation costs.
And remember those 800,000 furloughed federal employees who spent the ten-day shutdown in their pajamas watching TV?
The irony is those furloughed workers have always gotten paid retroactively for the time they were out. So, essentially 800,000 federal workers were home with their feet up getting a paid vacation at the taxpayer’s expense. So far, the 800,000 federal employees that were sent home during this shutdown have totaled more than 6 million work days lost.
Now, let’s say you’re a small business who has a contract to replace a roof at the federal hatchery in Lamar and you got lucky and finished the job just before the shutdown. Well, stop feeling so lucky because despite finishing the job just as the government closed, you can’t get paid because the contracting officer can’t authorize payments during the shutdown. It could be weeks before you can get paid. Small business owners can be hit particularly hard when this happens. Under the Prompt Payment Act and Cash Management Improvement Act, the government must pay its bills within 30 days–or else pay interest on any late payments. It takes about a week just to get the 8 authorizations it needs for the federal government just to ok the payment. If a shutdown stretches out beyond a week or two, tens of millions of dollars in interest and late payments are going to accrue and the longer the shutdown goes, the more it costs taxpayers. This shutdown comes at a particularly bad time for farmers many of whom apply for federal loans this time of year. The deadline to apply for much of the aid is Jan. 15, yet the offices where farmers must submit their applications have been closed since Dec. 28. The USDA’s Farm Service Agency also canceled all previously arranged loan closings when the shutdown started. In 2013, I stood inside a conference room and listened as high-ranking agency officials say: “We’ve been told to make the people feel the pain – make it hurt so that people will pressure their representatives to pass a budget.” That’s high-ranking government officials purposefully stating their intent was to terribly inconvenience and hurt the American people as part of the shutdown.
After the 16-day shutdown in 2013, Congress authorized an estimated $2.5 billion in back pay and other compensation for the furloughed workers and the event cost the government $7 million in revenue lost from entrance fees at national parks. Goldman Sachs determined the 2013 shutdown led the GDP to dip by .25 percent and Moody’s Analytics estimated the U.S. economy took a $24 billion hit.
The price tag for this year’s debacle: about $1.6 billion a week, $300 million a day, or $12.5 million an hour. That estimate, comes from economic consulting firm IHS Global Insight.
Here’s the truth: the $5.6 billion that Donald Trump is demanding for his wall is a rounding error in the federal budget. A budget that, under Trump, ran a $778 billion deficit in 2018 and a $2 trillion dollar deficit since he took office. In the end, the cost of the shutdown will actually exceed the cost of the Great Wall of Trump. What the Democrats and Republicans have done here is equivalent to paying a lawyer $20,000 to sue your neighbor for $500 worth of property damage. Shutting down the government is unbelievably irresponsible. Only Congress and the President would be petty enough to grind government to a halt and cost taxpayers and the economy more money than they are arguing over. The inability of the President and Congress to perform the most basic task of funding the government boarders on criminal.
Too often, what is ignored in all this political gamesmanship, as each party tries to score political points, is that their action – or inaction – hurts our nation’s most vulnerable citizens, our small business owners, our farmers, the economy, and only undermines American’s faith in our elected officials.
It’s probably far too much to hope that these petulant 2-year-olds will get their act together and do what’s right for the country instead of what’s right for their political party. What we need is a federal law that basically says if these inept buffoons fail to pass a federal budget on or before the new fiscal year begins on Oct. 1, it triggers a year-long continuing resolution and the budget is automatically re-enacted at the previous year’s level but with all earmarks (political pork projects) eliminated.
Maybe a law stripping the budget of all the pork these jokers use to buy themselves re-election would motivate them to actually do their jobs because it would negatively impact the only people and only thing they care about — themselves and their re-election.