What Would a Government Shutdown Mean For You?

September 30th was the final day before government funding expired and the last chance to re-fund it. Thankfully, a last-minute agreement was passed by the House and Senate to keep the government going through to November 17th, narrowly avoiding a government shutdown. But… what happens when November 17th comes around? How will it affect you, as a pre-retiree or retiree? What can you do to prepare? Today, we’ll discuss what a government shutdown is, previous shutdowns that have occurred, and answer some frequently asked questions. Hopefully, to help you prepare.

First of all, it’s important to understand just what a government shutdown is. A government shutdown occurs when the government fails to pass a budget or spending bill to fund its operations, resulting in many services and functions being temporarily disrupted. Furthermore, a shutdown affects government employees and contractors and can harm the economy. Shutdowns are usually the result of a budgetary impasse or a failure to reach an agreement on government funding between the government’s legislative and executive branches. Shutdowns have periodically occurred when there has been a failure to pass federal budgets or funding bills, such as what we just narrowly avoided last month.

Prior Government Shutdowns

Ever since 1976 when Congress introduced the modern budget process, there have been a total of 20 “funding gaps” during which funds were not appropriated for at least a day. However, prior to 1980, at no point did the government encounter a full shutdown. Instead, they continued normal operations through these funding gaps. Since 1981, a total of ten funding gaps lasting three days or fewer have occurred. Government operations were affected only minimally during these gaps.

A “true” government shutdown is characterized by operations being affected for a longer period. There have been a total of 4 of these shutdowns so far. The first two, taking place in 1995 and ’96, each lasted for 26 days. The third was in 2013, lasting just 16 days. The fourth shutdown, spanning 2018 and ’19, was the longest so far, lasting 35 days.

Frequently Asked Questions

How will a government shutdown personally affect you? The answer to this varies depending on your specific situation, of course. But, here are answers to some frequently asked questions that may help you gain a better understanding of what you can expect. Firstly, some things that we can assure you will most stay unaffected include:

Things That Likely Will Not Be Affected

Will a government shutdown affect when I receive my Social Security?
No, it will not. A government shutdown will not impact Social Security’s funding, however. Some Social Security Administration employees will be temporarily suspended, potentially affecting their customer service.

Will you still receive your mail?
Yes, you will. The U.S. postal service will be completely unaffected during a shutdown, so you will still get your mail delivered.

Will Medicare and Medicaid benefits be affected?
Current Medicare, Medicaid, and disability insurance beneficiaries will continue to receive their benefits even during a shutdown.

Will military and federal retiree benefits be suspended?
Military and federal retirees will continue to receive retirement benefits. The processing of new applications or other requested changes will, however, be delayed.

How will a shutdown impact state and local services?
A federal government shutdown will not affect any state or local services. At least, not immediately: Some state or local governments may change their operations with federal funding cut off. You will have to check with your own state and local agencies for specifics.

Things that Will Be Negatively Affected

Will air travel be affected?
Air traffic controllers, TSA, and Customs and Border Protection agents will remain on the job without pay. However, if some do not report to work (which has happened during past shutdowns) it will result in significant delays across the country.

How will this affect environmental protection and cleanup?
During a government shutdown, the EPA will stop inspecting most hazardous waste sites, as well as drinking water and chemical facilities. Efforts to address dangerous contaminants linked to adverse health effects will also be delayed, unfortunately.

What will a shutdown mean for disaster relief efforts?
FEMA staff will still respond to emergencies, thankfully. However, they’d be forced to delay long-term projects due to a lack of funding for the Disaster Relief Fund.

What will this mean for medical research?
The National Institutes of Health will be forced to delay new clinical trials. Additionally, new patients waiting for a chance at treatment through a clinical trial will have to be turned away.

What will be the effect on housing?
The Federal Housing Administration (FHA) will have to stop insuring some new mortgages. Furthermore, the Department of Housing and Urban Development (HUD) will have to stop processing some new loans. Funding for federal housing assistance programs, such as Housing Choice Vouchers, may be put in jeopardy in the event of a prolonged shutdown.

What will be the impact on food assistance?
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) will quickly run out of funding during a shutdown, and be unable to provide food for children and parents in need.

We Can Help

An FIA (fixed indexed annuity) can offer you a source of income that could last you your entire life, and won’t be affected even in the event of a government shutdown. Right now, one of our annuity products is offering a 40% bonus: This means that for every $100K added to your FIA, an additional $40K would be added to your income and death benefits. And that’s the best offer we’ve ever seen on an annuity product. Contact DPG Senior Signature Solutions to learn more.

Source: Debbie Dingell

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