With the partial government shutdown now two weeks old — and no end in sight — consumers and federal workers are in for financial pain that’s likely to get worse.
Federal tax refunds are likely to be delayed.
Hurricane preparedness could be affected.
Paychecks for many federal workers — including thousands in Florida — likely won’t show up in bank accounts as regularly scheduled.
Federal courts are running out of money, and Miami’s usually buzzing federal courts will find it more difficult to operate. All U.S. immigration courts were shuttered since Dec. 24, adding to an already surging backlog.
Agencies already out of money and running on reserves, if they have any left, include the Departments of Treasury, Homeland Security, Interior, State, Agriculture, Justice, Commerce, Transportation and Housing and Urban Development. Several smaller departments are also affected.
Programs using emergency funds to keep going can’t keep continue to operate normally much longer.
“This is a major extended shutdown,” said Randy Erwin, president of the National Federation of Federal Employees, which represents about 110,000 federal workers, including 2,000 in Florida. He said he fears this could end up being the longest shutdown ever, with far-reaching consequences for the economy.
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 sometimes-subtle impacts that are already being felt — such as trash pile-ups in non-staffed national parks and airline repairs that are without the usual double-checks performed by federal safety inspectors — will become more pronounced, and more obvious, as the shutdown drags on. By late February, food assistance programs would be affected.
Currently, most real estate transactions — about 90 percent, figures Ryan Paton, principal at Fort Lauderdale-based Capitol Lending Group — are proceeding normally; most banks and housing agencies have created workarounds for tax verification forms that are required.
But jumbo loans — common in Miami-Dade’s high-priced real estate market— that require Internal Revenue Service tax transcripts, are likely to be affected.
Ed Wilburn, a partner at Kendall-based FEMBi Mortgage, a USDA-approved lender, said he already has customers who are not able to close on transactions. None of his clients wanted to speak on the matter for fear of losing their bids.
“They’re getting anxious,” he said.
South Floridians relying on Federal Housing Authority functions also could be affected; at the moment, that agency is not reviewing or approving new condos, lenders, audited financial statements, or performing lender re-certifications.
And borrowers seeking U.S. Department of Agriculture Rural Housing loans in areas such as Homestead are already out of luck; that agency’s mortgage processing workers have been furloughed .
“No new rural housing loans or guarantees [are being] issued, which [could] result in a setback in construction start-up, as well as a potentially costly inconvenience to buyers and sellers depending on a single family housing loan or guaranteed loan closing,” the USDA posted on its website. “A more permanent interruption in the program would cause a substantial reduction in housing available in rural areas relative to population.”
Evaluating the economic impact of a shutdown during the shutdown is like evaluating an earthquake while the ground is trembling, said Erwin, of the federal employees association. “Right now, it just feels really shaky,” he said.
The last extended government shutdown, a 16-day halt in 2013, cost the economy approximately $20 billion, according to Moody’s Analytics. Ratings agency Standard and Poor’s put the figure at $24 billion.
For now, at least, South Florida’s seemingly ceaseless road work will continue. Spokespeople for the Florida Department of Transportation said it was not anticipating significant impacts to its operations as a result of the federal government shutdown. Miami-Dade also said it was not anticipating any issues. That could change if the shutdown continues into February.
Air travel is not directly affected, according to a spokesperson for the Federal Aviation Administration. But approximately 2,000 workers for the Transportation Security Administration at Miami International Airport and Fort Lauderdale-Hollywood airports, alongside 470 air traffic and radar controllers, do not know when they will see their next paycheck, the agency said.
Friday, CNN reported many TSA workers at some airports are calling in sick — though that hasn’t yet caused problems at MIA, according to airport spokesman Greg Chin.
Here’s a timeline of likely impacts should the shutdown continue.
JAN. 11: Friday marked the end of the first pay period that fell entirely within the shutdown, meaning furloughed employees will miss a paycheck covering that pay period that would normally be delivered no later Jan. 14. And that comes on top of some who missed checks from the last pay period.
Miami-Dade and Broward are home to approximately 28,000 federal employees, according to Florida Department of Economic Opportunity data. Nationally, about 40 percent of federal workers are going without pay.
Florida’s passport processors may also be in danger of missing pay, according to Erwin. They are still on the job because they are considered essential State Department workers, but authorization for their pay runs only through Jan. 11.
Federal court operations have already being curtailed; the courts have been operating by using court fees and other revenue, but officials have said they’ll have to re-evaluate after Jan. 11.
THIRD WEEK: The Internal Revenue Service has not yet announced when it would begin accepting 2019 tax returns, but typically it happens in the third or final week of January. That will likely be delayed.
The IRS has already shut down non-essential services. Mitch Helfer, managing director of the CPA Miami accounting firm, said disruptions such as hurricanes tend to shut down local offices for weeks. “It takes them a long time to get back going when disruptions hit their system,” he said.
According to Miramar-based meteorologist Eric Blake, National Oceanic and Atmospheric Administration hurricane training for key stakeholders in the southeast will be put on hold. Non-essential NOAA workers have already been furloughed and those remaining on duty are not seeing paychecks.
FIRST WEEK: The billions of overpaid tax dollars that are normally refunded to households by the first week of February every year will likely come later, due to the shuttering of the IRS. People will continue paying their taxes, but won’t receive refunds as promptly as usual. The average refund in 2017 and 2018 was just more than $2,000.
The president has to submit his budget proposal to Congress by the first Monday in February. If the shutdown continues, typical agency input on what that proposal should include won’t be available and the budget process for the next fiscal year, which begins Oct. 1, will be stalled.
States, which rely on federal funding for big chunks of their budgets, will start to feel the sting as money for highways, community programs and other services could be delayed.
FEB. 4: The president has to submit his budget proposal to Congress by the first Monday in February. If the shutdown continues, typical agency input on what that proposal should include won’t be available and the budget process for the next fiscal year, which begins Oct. 1, will be stalled.
LATER IN THE MONTH: Low-income households can receive food aid from the Supplemental Nutrition Assistance Program, formerly known as food stamps. The shutdown puts more than 40 million people at risk of having their benefits dry up. While January benefits are expected to remain intact, it’s unclear what could happen next month.