When the Federal Government Shuts Down, What’s the Impact Beyond Washington?

Two times in recent months the United States Congress has narrowly avoided a shutdown of the U.S. government by passing stopgap funding bills to keep the federal government operating. Now the clock is ticking again, and legislators face a pair of looming deadlines and a potential shutdown if new funding bills are not passed in time.

While the political negotiations over the bills are centered in Washington, D.C., the repercussions of a federal shutdown would quickly be felt at the state and local level across the entire country.

“In Illinois, the impact would be statewide, involving everything from national parks to airports to health and social service programs,” says Professor of Public Administration Roland Calia at Illinois Institute of Technology’s Stuart School of Business.

Calia’s teaching and extensive professional and research experience focus on areas including governmental tax and fiscal policy, public and nonprofit financial management, state and local government budgeting, performance measurement, and economic development.

“Certain services would continue to be provided, such as Social Security and disability payments, veterans benefits, and the Medicare system, but the operations of many federal agencies would be halted or reduced,” Calia says. “There are over 42,000 federal employees in Illinois and most would be furloughed during a shutdown, leading to service disruptions in several key policy areas.”

He points to examples that demonstrate some of the breadth of a shutdown’s effects, such as:

• Loss of access to government-funded health care for approximately 65,000 children in Illinois

• Reduction or loss of nutritional assistance to 155,000 low income women and children in Illinois through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which is administered by the Illinois Department of Human Services but funded by the federal government

• Seniors and veterans unable to get their questions answered or problems addressed by the U.S. Social Security and Veterans Administrations because the agencies’ employees have been furloughed

A brief shutdown likely would not lead to major disruptions, according to Calia, but that would change if it continues beyond a few days.

“A lengthy federal government shutdown of a month or more would have a major economic impact, primarily due to slowdowns in air travel and cutoffs of social service funding for at-risk populations,” he says. “The effects would be especially severe for Illinois residents who rely on federally funded nutritional or health assistance.”