September 27, 2013

Reed and Whitehouse Work to Avert Government Shutdown

Senate Passes a bill to keep the government running, but if the House refuses to act it could have negative consequences for RI

WASHINGTON, DC – Today, the U.S. Senate voted 54 to 44 to approve a short-term spending plan that will keep the government funded through November 15, 2013.  U.S. Senators Jack Reed and Sheldon Whitehouse voted for the legislation, which must now be approved by the U.S. House of Representatives.

If the House fails to act, Reed and Whitehouse warn that a government shutdown would hinder economic recovery, jeopardize important services for working families, and have a negative effect on Rhode Island.

“If Republicans who consider themselves members of the Tea Party force a government shutdown, commerce won’t grind to a halt but our economy will take a needless hit and there could be a ripple effect that hurts states, local communities, and the middle-class.  The American people want their government to work and they want their representatives in Washington to work together.  There are a lot of unknowns about a shutdown’s impacts, but forcing the government to shut down for reasons the vast majority of Americans disagree with is a terrible signal and could create undue hardships for families and businesses,” said Senator Reed.

“Today, the Senate took the responsible step of passing legislation to fund the government,” said Senator Whitehouse.  “It’s time for Speaker Boehner and his House Republicans to drop their extremist demands – demands that were just the subject of the Presidential election which they lost – and join the Senate to do what’s right.  As Rhode Island continues recovering from the recession, we can’t afford to play games with government services that our people count on.”  

If the government shuts down, contingency plans would go into effect and agencies would continue to provide functions relating to national security and the safety of life and property.  However, thousands of Rhode Islanders who work for the federal government, as well as contractors who do business with the federal government might also be instructed to stay home.  The shutdown could cost state and local governments millions of dollars per day, further straining already-stretched budgets and threatening economic recovery.  Federal grants that support state-run programs and help pay the salaries of state employees would be delayed, costing states tax revenue and reducing business activity at the local level.

Approximately $2.66 billion of the state’s total $8.1-billion budget comes from the federal government.  According to the latest statistics from the Rhode Island Economic Development Corporation (RIEDC), the federal government is the state’s third largest employer, with over 11,500 employees (not including active duty military personnel and reservists). 

A prolonged government shutdown could halt construction work on bridges and roads and make it harder for people to do simple tasks like renew their passports or apply for federal benefits.  Here are some of the many ways a federal government shutdown would hurt middle-class families and negatively impact Rhode Island:

Financial support for Rhode Island’s small businesses: A shut down would put a stop to the Small Business Administration’s ability to provide a critical source of small business credit until the government resumes operation.  According to the SBA, Rhode Island is home to 23,537 small businesses.  In Rhode Island during FY12, SBA approved $87.4 million loans to local small businesses.

Military families in Rhode Island could have their paychecks delayed: The Department of Defense estimates that during a shutdown nearly half of the civilian workforce would be sent home without pay, while the rest would continue to work for delayed pay, impacting over 4,000 civilian workers in Rhode Island.  Additionally, nearly 7,300 servicemembers in Rhode Island would remain on duty, but could see their pay delayed if the shutdown extends for more than 10 days.

7,000 federal employees in Rhode Island could be temporarily out of work: Federal employees around the country would potentially be furloughed in the event of a government shutdown. These workers may see reductions in their pay from the time they were forced to stay home because the government was shuttered.

Social Security checks for new seniors: Although checks for current Social Security benefits would still go out during a shutdown, applications for new benefits would be delayed and services for seniors could be significantly curtailed. The benefits of 200,000 Rhode Islanders on Social Security (retirees, the disabled, children, and widows) could be denied services because of the shutdown. As a result of furloughs and service cuts during the last shutdown, nationwide about 112,000 claims for Social Security and disability benefits were not taken, 212,000 applications for Social Security Numbers were not taken, and 800,000 callers were denied service on the Social Security Administration’s 1-800 number.

Low-Income Energy Assistance: The 34,000 Rhode Islanders who depend on the Low Income Home Energy Assistance Program (LIHEAP) could take a hit.  With critical winter heating assistance needed, Reed, Whitehouse, and Senator Susan Collins (R-ME) sought a bipartisan fix included in the CR to allow the U.S. Department of Health and Human Services to provide the bulk of the LIHEAP allotment to the states ahead of adoption of a full year funding bill. 

Head Start: A government shutdown could force Head Start centers around the country to close.  Last year, Head Start served about 2,450 children in Rhode Island.

Veterans benefits: The processing of new educational, pay, and pension benefits for the 90,000 Rhode Island veterans could be delayed. During the 1995-96 shutdowns, more than 400,000 veterans nationwide saw their disability benefits and pension claims delayed, while educational benefits were delayed for 170,000 veterans.

Wildlife Refuges, National Parks and Historic Sites: In a shutdown, the more than 950 Wildlife Refuges and National Park Service sites nationwide would close, including Roger Williams National Memorial in Providence and the Rhode Island Refuge Complex.

-end-

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