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Preparing for a Federal Shutdown


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If Congress does not pass a spending bill (either a continuing resolution or appropriations bill) by September 30th, there will be a "federal shutdown" on the morning of October 1st. The purpose of this email is to provide you with practical advice. If you're interested in charges and counter-charges as to who is at fault in this impasse just turn on any cable news television show.

The basic advice is that if you have business with a federal agency that can be completed before September 30th, please try to complete it. Whether you happen to be applying for Social Security or Medicare for the first time, or a visa or passport and you can get it done by September 30th, you may want to consider acting with haste.

Pasted below is a column that I wrote for the Daily News on September 26, 2013. Please don't hesitate to contact us if we can be of any assistance with any federal agency, particularly if your matter is affected by this possible federal shutdown.

A government shutdown, like the one experienced in 1995, is a very real possibility. Next Tuesday, the federal government shuts down unless Democrats and Republicans can reach agreement on issues that divide them sharply. In that event, on Oct. 1, funding for a number of frequently used government services would stop.

The last government shutdown serves as a cautionary tale, illustrating which services would be adversely affected. According to the Congressional Research Service, a number of services could come to a sudden halt, including visa and passport issuances, some law enforcement activities, financial services, access to national parks, museums and monuments, and new signups for Social Security, Medicare and veterans services.

This happened in 1995 when 10,000 home purchase loans and refinancing applications, totaling $800 million worth of mortgage loans for moderate and lowincome working families nationwide, were delayed.

Looking just at the Social Security Administration, we saw delays involving 10,000 new Medicare applications, 212,000 Social Security card requests, 360,000 individual office visits, and an estimated 800,000 tollfree calls for information and assistance. The Department of Justice suspended work on more than 3,500 bankruptcy cases. And 368 National Park Service sites were closed at a loss of 7 million visitors.

Additionally, 200,000 U.S. applications for passports went unprocessed, which cost tourist industries and airlines millions of dollars, and American veterans endured cancelled vocational rehabilitation appointments and unprocessed compensation payments, and pension and education claims. GI Bill education checks and insurance death claims were delayed, while counseling services for avoiding foreclosures were cancelled.

At a minimum, if you are purchasing a new home, travelling overseas, or filing for bankruptcy, you would be advised to consider how delays might affect your plans or business transactions. In some cases you can minimize the problem by filing applications as soon as possible.

Some passports may be processed for emergency reasons, such as overseas family deaths or business emergencies, but those situations are unrelated to a government shutdown and supporting documents must be provided to the Los Angeles regional passport office.

Many federal workers will be furloughed. Whether Congress will act to pay them for furlough days is uncertain. In the meantime, federal employees may obtain a reserve line of credit from some credit unions to cover expenses in the absence of a paycheck. There is usually a 3 percent fee on the used portion of the line of credit but not on any unused balance.

If your family is planning to visit a national park, you may want to make alternative plans, lest you find yourself with a cranky family in a long line of cars outside a national treasure that has been gated shut.

Coping with unprocessed applications for Social Security and Medicare will be difficult, particularly during this recession. Any lapse in veterans' benefits should be unacceptable given their valiant service to our country, but many would not receive health, compensation, pension and education payments they are due.

Some of the consequences of the last shutdown are less clear. For example, in 1995 the Centers for Disease Control ceased disease surveillance, so updated information about the spread of AIDS and the flu were unavailable. Toxic waste cleanup work at 609 sites stopped and 2,400 Superfund workers were sent home.

Hopefully, cooler heads will prevail and the threat of a government shutdown will pass. But I would be remiss if I did not urge you to plan for the possibility that we will repeat the experience of 1995.

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