Politics & Government

Delayed tax refunds. Missed federal paychecks. The shutdown’s pain keeps growing.

What happens when the government shuts down?

The world won't end if Washington can't find a way to pass a funding bill. That's the truth about a government "shutdown": the government doesn't shut down.
Up Next
The world won't end if Washington can't find a way to pass a funding bill. That's the truth about a government "shutdown": the government doesn't shut down.

With the partial government shutdown now nearly two weeks old — and no end in sight — consumers and federal workers are going to gradually but dramatically feel more financial pain.

Furloughed federal workers have now officially gone a full pay period without working, and therefore are unlikely to be paid until at least late January.

Federal tax refunds are about to be delayed.

Federal courts are running out of money and will find it more difficult to operate after Jan. 11.

States, which rely on federal funding for big chunks of their budgets, will feel the sting as money for highways, community programs and other services could be delayed.

Programs using emergency funds to keep going can’t keep continue to operate normally much longer.

The president’s budget for the next fiscal year, which begins Oct. 1, is usually unveiled at the beginning of February. Shuttered agencies won’t be able to provide needed information to the Office of Management and Budget to draft the blueprints.

The partial shutdown began Dec. 22, after President Donald Trump indicated he would not sign a budget that did not include what he deemed adequate money for a border wall.

The budget needs support from both parties to pass Congress, since Republicans control the Senate and Democrats as of Thursday run the House. Trump, leaders of Congress and other officials plan to meet Friday morning, after a Wednesday session produced no path forward.

The world won't end if Washington can't find a way to pass a funding bill. That's the truth about a government "shutdown": the government doesn't shut down.

Consumers could feel the sting very soon.

The Internal Revenue Service usually starts accepting federal tax returns in the third week of January, and is currently operating with a skeleton crew. If Treasury remains shut down into that period and beyond, federal tax returns will pile up.

The government will continue collecting taxes, but those expecting refunds are likely to see delays. By Feb. 2, 2018, the IRS had received 18 million tax returns, processed 17 million, and given out about $12.6 billion. Those numbers were slightly below the volume on Feb. 3, 2017.

The average refund both years was just more than $2,000.

No tax returns would be processed during a shutdown, and the longer the closings go past the third week of January — or whenever the IRS plans to start accepting returns — the longer it will take to process returns, possibly even affecting those who usually don’t file until April.

In 2013, the 16-day government shutdown in October delayed tax filing season in 2014 by two weeks, according to an OMB report.

Federal employees will feel the impact sooner. They received a paycheck last week, covering the two-week period preceding the shutdown.

But Friday marks the end of another pay period, and federal employees subject to the shutdown, who would normally be expecting checks on Jan. 11, will go without them.

Affected are about 380,000 employees of nine Cabinet agencies — including Treasury, Homeland Security, Interior, State, Agriculture, Justice, Commerce, Transportation and Housing and Urban Development — as well as several smaller departments.

Some agencies have used leftover administrative funds to keep offices functioning during the shutdown.

That money is running out fast. The Environmental Protection Agency is reportedly about to run out of those funds and buildings run by the Smithsonian Institution shut down this week.

The Office on Violence Against Women in the Department of Justice is one of the agencies still using emergency funding. Officials declined to say how much longer the program could run on that money.

That’s all in addition to more obvious problems that are exacerbated by long shutdowns, such as trash and waste piling up in national parks.

Kate Irby is based in Washington, D.C. and reports on issues important to McClatchy’s California newspapers, including the Sacramento Bee, Fresno Bee and Modesto Bee. She previously reported on breaking news in D.C., politics in Florida for the Bradenton Herald and politics in Ohio for the Cleveland Plain Dealer.
  Comments