The trickle-down effect if there is a government shutdown


(WFXR) – The clock is ticking for U.S. lawmakers to find a compromise on two major pieces of legislation to keep the government-funded. One focuses on preventing a government shutdown. The other deals with raising the debt ceiling.

“Economically speaking, those two things have largely different effects,” said Dr. Michael Enz, associate professor of economics and business administration for Roanoke College.

Dr. Enz says those most likely to feel the impact of a government shutdown are people who receive government benefits, such as Supplemental Nutrition Assistance Program (SNAP) benefits.

“There’s very little you can do. Most people who are reliant on benefits can’t easily save for poor economic times so you’re really stuck with feeling the pain if your benefits end up getting delayed,” said Dr. Enz.

Roanoke’s Local Office on Aging (LOA) operates more than 30 community-based organizations and is focused on helping senior citizens remain independent for as long as possible. About 60 percent of its money comes from state and federal funding.

The organization’s president and CEO, Ron Boyd, says they are somewhat concerned about what a government shutdown could mean for the nonprofit.

“You know, we could go a number of months and it would not affect us,” Boyd said. “Of course, if it goes long-term then we would have to start evaluating what we could do and might have to suspend some services.”

The second critical issue America is facing is the debt ceiling. The U.S. could run out of money to pay its bills on Oct. 18. If that happens, economists say it could have catastrophic effects.

“There’s one estimate out there by Mark Zandi right now who’s with Moody’s. I think he estimates that it could cost up to six million jobs and wipe out $15 trillion worth of wealth,” said Dr. Enz.

U.S. Sen. Tim Kaine weighed in on the topics during a conference call, saying, “Democrats, we don’t flirt with shutdowns. We’re not going to do it. We don’t flirt with default and we’re not going to do it. Period.”

American lawmakers have until midnight on Friday, Oct. 1 to reach a compromise to avoid a government shutdown.

U.S. Sen. Mark Warner introduced legislation on Wednesday, Sept. 29 to put an end to future government shutdowns.

The ‘Stop STUPIDITY (Shutdowns Transferring Unnecessary Pain and Inflicting Damage In The Coming Years) Act’ would protect federal workers and employees, who are often forced to go without pay during government shutdowns, by keeping the government running in the case of a lapse in funding.

This legislation would also help prevent the chaos that shutdowns can wreak on the lives of veterans, seniors, and other Americans who rely on timely government services. Additionally, it would help prevent the kind of backlogs and delays commonly associated with government shutdowns, including those affecting the Internal Revenue Service (IRS), the Social Security Administration, and SNAP.

“Our nation’s federal workers have worked day-in and day-out during the pandemic to make sure that American families and businesses can count on the government in their time of need,” said Warner. “I can’t think of a worse way to repay these civil servants than by shutting down the government in the midst of an ongoing health and economic crisis. My legislation would spare federal workers from the volatility of government shutdowns, and preserve the stability our government necessitates as we continue to fight COVID-19.”

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