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Federal Shutdown Could Furlough Thousands in SC

11:19 PM, Apr 6, 2011   |    comments
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Gannett Washington Bureau

WASHINGTON - Many of the 21,000 federal employees in South Carolina face furloughs unless Congress passes a spending bill for the rest of this fiscal year before midnight Friday.

If the government shuts down because of a budget impasse between congressional Democrats and Republicans, the Internal Revenue Service would stop processing tax returns - due April 18 - that filers send by mail, according to the White House's Office of Management and Budget.

Electronically filed returns would still be processed and refunds would be deposited electronically, according to an OMB official, who spoke to reporters on condition of anonymity on Wednesday.

If the government shuts down at 12:01 a.m. Saturday, this is what will happen, according to the OMB official:

- The IRS will stop conducting tax audits.
- The Small Business Administration will stop guaranteeing loans and making direct loans to establishments across the U.S.
- The Federal Housing Administration will stop processing mortgage loans, meaning 30 percent of home loans issued nationwide will be in limbo.
- National parks, forests and wildlife refuges will close.
- Social Security beneficiaries will continue to receive checks
- Medicare recipients will continue to receive benefits.

President Barack Obama believes inability by Congress to reach an agreement would be "highly unnecessary and the height of irresponsibility," White House spokesman Jay Carney said Wednesday.

Not every federal employee would be furloughed in the event of a shutdown, but about 800,000 nationwide would be idled until lawmakers reach an agreement. The last time the government shut down was 1996.

According to the U.S. Office of Personnel Management, South Carolina was home to about 21,000 federal employees in December, the latest month for which figures were available.
Of those, about 11,000 were employed by the Department of Defense.

Employees doing work "necessary for the safety of life and the protection of property" - such as soldiers - would have to report to work, though they wouldn't be paid until Congress approves retroactive pay.

The chain of events leading up to a possible government shutdown began last year, when Republicans regained control of the House based on promises to reduce federal spending. Since then, tea party activists have demanded even larger cuts. Senate Democrats worry that such large cuts would devastate vital social programs, including those serving children and the elderly.

In February, the House passed legislation to cut $61 billion in spending for the rest of fiscal 2011, but the Senate rejected that amount as too large. The Senate still hasn't approved approve a spending bill of its own.

The debate centers on proposed cuts to the "discretionary" funding needed to run various government agencies, which accounted for about 38 percent of the budget in fiscal 2010. For now, Congress is not contemplating cuts to the Medicare, Medicaid or Social Security entitlement programs, which accounted for about 41 percent.

To keep the government operating, Congress has approved a series of stopgap spending bills to take the government through to the Sept. 30 end of this fiscal year that have included $10 billion in cuts. The latest of those bills expires at midnight on Friday.

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