Shutdown boils down to essential vs.non-essential programs

Press worker Willow Wimbush feeds sections of the FY 2012 U.S. Government budget into a binding and trimming machine at the U.S. Government Printing Office in Washington, DC.

JEREMY HOBSON: Now let's get to the budget negotiations in Washington. They don't seem to be going anywhere. And if there's no deal by Friday, the government shuts down.

Richard DeKaser is an economist with the Parthenon Group. He joins us now live as he does every Wednesday. Good morning.

RICHARD DEKASER: Good morning.

HOBSON: So if there is a government shutdown, it seems like the key words in terms of what stays open and what shuts down are "essential" and "non-essential." Explain.

DEKASER: Well, three classes of workers are "essential" -- those that provide national securities, that's basically all the armed forces. Those who pay benefits -- Medicaid, Medicare and Social Security for example, as well as those who are responsible for protection of life and properties, so federal prisons for example. Those people would stay on the payroll, they'd continue to work, and the postal service which is entirely self-financing is also exempt. So you'll continue to get the mail. If we look back at 1995 when we had a brief shutdown, about 30 percent of federal workers were furloughed.

HOBSON: And what about non-essential Richard? What does get shut down?

DEKASER: Well, we've got the parks of course and the Smithsonian Museum. So people who were planning to visit those locations will be shut out.

HOBSON: What about the IRS Richard? We're in tax time.

DEKASER: We are. You can continue to send in your payments, but they will not be processing refunds during that time, so again, here's a class of important activity. Last time around, again, in 1995 about $400 million supposedly was not received because of these workers not being on the job to do that.

HOBSON: Richard DeKaser, economist at the Parthenon Group, thanks for your time this morning.

DEKASER: It's been a pleasure.

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