Federal shutdown will cause avoidable uncertainty and hardship

We are likely just hours away from a federal government shutdown that will harm families, businesses and the nation’s economy.[1] If by September 30 members of Congress are unable to pass a full-year spending bill or — more likely at this 11th hour — a temporary stopgap bill, significant portions of the federal government will shut down.[2]

Many federal employees will immediately be furloughed, while employees deemed “essential,” like air traffic controllers and active-duty members of the military, work without pay.[3] Although important supports like Social Security and Veteran benefits will continue to flow, the pain of a shutdown will be real, and widespread.

The Senate is coalescing around a bipartisan temporary funding bill, called a Continuing Resolution, that is mostly sensible, and, if approved, would avert a shutdown.[4] But it’s unlikely to pass the House, where the recalcitrance of some members is notable because they are comfortable inflicting the pain of a government shutdown on Americans so they can pass a budget that would inflict even more pain.

These House members are clear about what want in a full-year spending bill: big cuts to programs for low-wage households, to Medicaid and ACA Marketplace tax credits that help people get needed health care, and to our most important nutrition assistance program, SNAP. They want new and extended tax cuts favoring the highest earners.[5]

Passing a budget is one of the essential responsibilities of Congress. Allowing a partial government shutdown is terrible way of doing business that causes avoidable uncertainty and hardship.

Here is how some key public programs and services will be affected by a partial shutdown:

WIC | The Women, Infant and Children nutrition program would quickly stop providing nutritional support for 7 million people. WIC is also at risk in annual funding bills working their way through the House and Senate. In each, roughly 600,000 eligible low-income postpartum adults, toddlers, and preschoolers — 5,400 in Iowa — would lose WIC altogether and 4.7 million — 92,000 in Iowa — would see cuts in benefits for fruits and vegetables.[6]

Food, workplace and environmental safety inspections | Most will immediately halt.

Small Business Administration and USDA loans | Processing will immediately halt.

SNAP | Federal officials have adjusted payment schedules so SNAP benefits will go out in October as scheduled. However, if a shutdown were to go into mid-October, November SNAP benefits would be at risk. A lost month of benefits would hurt over 230,000 Iowans, most in households with children, and take $43 million out of the state economy.[7]

Medicaid and Hawki (CHIP) | The federal government will continue making payments to states, which administer Medicaid and CHIP. But there would be very limited capacity to provide oversight and technical assistance to states in the midst of “possibly the greatest Medicaid administrative task since the program’s inception”[8]: the “unwinding” of pandemic-era continuous coverage provisions that requires states to redetermine eligibility for all enrollees. It’s especially perilous timing coming as 30 states, including Iowa, are required to restore coverage to people (up to 50,000 in Iowa) who were incorrectly cut from the program due to problems in the redetermination process.[9]

Child care | Because of its funding cycle, Child Care Assistance for low-wage working families should be mostly unaffected by a shutdown in the short term. However, there are pressing child care challenges as we start a new fiscal year on October 1. Federal child care aid that was part of the American Rescue Plan expires September 30. State officials and providers were able to use those funds to bring needed stability to our child care system. Common Good Iowa is among nearly 1,000 advocates and providers nationwide calling on Congress to pass $16 billion a year in emergency child care funding to head off a catastrophic funding cliff when the ARPA dollars expire.[10]

Head Start | The federal Head Start program directly funds individual programs on a rolling basis throughout the year. In October, programs serving about 10,000 students nationally will immediately close. That number will ramp up each month a shutdown continues. No Iowa programs will be affected in October, but some could be at risk if the shutdown extends into November.

Social Security, Medicare and the U.S. Postal Service | Because they do not rely on annual appropriations, they will continue to operate normally.