DCist: Lawmakers Warn Federal Shutdown Would Hit D.C. Region Hard

DCIST, MARGARET BARTHEL

The deadline for Congress to prevent a government shutdown is imminent; the fractious, divided House of Representatives has until the end of the month to approve the funding needed to keep the federal government open.

If negotiations fail and the government runs out of money, it’ll likely have dire consequences for the D.C. region, which is home to hundreds of thousands of federal workers, contractors, and military service members.

In the past, shutdowns have touched nearly all aspects of life locally. They’ve forced D.C.-area governments to allocate precious resources to help furloughed employees, strained food banks and other parts of the social safety net, added to mental health burdens on local workers, and tanked sales at retail businesses and restaurants.

Some members of the region’s congressional delegation are beginning to raise that alarm.

“Previous shutdowns have historically hurt the finances and the job security of families across the Commonwealth, especially in Northern Virginia,” said Virginia Rep. Abigail Spanberger, a Democrat, at an event with local leaders and business owners in Prince William County on Tuesday.

Spanberger highlighted the 172,000 Virginians who work for the federal government, and 130,000 military service members are stationed in the commonwealth — as well as countless more government contractors (in the last shutdown, about 375,000 contractors were affected, according to the Northern Virginia Chamber of Commerce). The D.C. region as a whole is home to about 370,000 federal workers. There are 2 million people in the federal workforce in total.

“Intentionally shuttering the government of the most powerful country on earth is foolish, weakening and embarrassing America on the world stage,” said Virginia Congressman Don Beyer in a statement. “It also does lasting damage to our economy and inflicts harrowing uncertainty on millions of civil servants and their families.”

The uncertainty over a possible government shutdown layers on top of ongoing concerns over the impact federal hybrid work policies are having on the economic health of the region — already on precarious footing in the aftermath of the COVID-19 pandemic, supply chain challenges, and high inflation.

Major economic losses

When Congress fails to fund the federal government, many “nonessential” civil servants are furloughed without pay. Those whose work is considered “essential,” like TSA agents, federal prison guards, or national security employees, are expected to continue coming to work without receiving a timely paycheck. Federal workers usually receive back pay after the political crisis passes. Contractors, who often work lower-wage jobs, do not typically receive that money, a concern D.C. Delegate Eleanor Holmes Norton has raised with the White House.

Spanberger, a former CIA officer, noted the pain of those considerations as a shutdown looms.

“I have been a federal employee. I have [had] those conversations, when you sit around the room and say, ‘Who is an essential employee in the event that we have a government shutdown?’” she said.

Spanberger chided Republicans in Congress for engaging in brinksmanship around the government funding deadline. In the spring, with risk of a default on the national debt looming, she introduced a bill to prevent members of Congress from drawing a salary during government shutdowns and defaults. Beyer, with fellow Virginian Sen. Tim Kaine, introduced a bill last week that would prevent a shutdown by creating an automatic continuing resolution — the measure needed to fund the government — if no other agreement is reached by the end of September.

Previous government shutdowns — a partial one in 2019 and a full one in 2013 — wreaked havoc on the local economy. In the 2019 closure, which lasted 35 days and was the longest in history, one estimate suggested the region lost about $1.6 billion in economic activity and earnings in the first 25 days of January (some of the lost money was made up after federal employees were repaid). D.C. officials said the District lost $47.4 million.

Nationally, the Congressional Budget Office estimated the 2019 shutdown delayed about $18 billion in federal spending and led to a $3 billion shortfall in national GDP.

Hardships for workers 

Temporarily out-of-work civil servants and their families feel the pinch of delayed paychecks acutely, particularly in a high-cost region. Many furloughed workers in the past have applied for unemployment benefits, leading to a 186% spike in those benefits in Northern Virginia in 2019, according to Spanberger. (In D.C. and Maryland, about 7,000 federal workers had applied for unemployment just a few weeks into the shutdown.)

Spanberger was sworn into her first term in office during the 2019 partial government shutdown and remembered the mental toll the uncertainty put on workers.

“I sat down with federal employees and contractors who were impacted. I heard their stories and importantly, I heard their pain,” she recalled. She said she’d worked at food banks that opened extra hours specifically to serve the federal workforce.

“We have experienced shutdowns too, where it has resulted in mental health issues, homelessness, and people who have not ever recovered,” added Jinnae Monroe, a member of the Prince William Chamber of Commerce’s Board of Directors. “We cannot afford to do that again.”

Local governments have historically been forced to step up to help furloughed employees, noted Supervisor Kenny Boddye, who represents Prince William’s Occoquan District.

“Last time, it wasn’t long before triage needed to be done in the form of meal trains, mutual aid and deferred payments on important projects and important bills at home and the workplace,” he said. “There’s an immediate influx of massive amounts of applications for assistance for utilities, housing and in worst cases, feeding and rapid rehousing for a newly unsheltered population.”

D.C., for example, offered $9 million in mortgage assistance to furloughed federal workers in 2019. Prince George’s County provided support to K-12 and community college students affected by the shutdown.

Problems for local businesses, tourism

The hardship experienced by federal workers and their families trickles down to the restaurants and small businesses civil servants would otherwise be able to patronize — a key concern for Wakeena Dickens, a veteran who owns a food hall stand, cafe and catering business called Bon Mangé Cuisine in Woodbridge.

“A decline of sales and revenue would definitely greatly impact us,” she said. “We are now full-time entrepreneurs. The previous shutdown, we were in corporate America in our full-time jobs, but now we are all in. So this is a little bit scarier.”

Restaurants in D.C. saw significant downturns in sales — between 20 and 60 percent, according to the local restaurant association — during the 2019 closure, with businesses geared towards tourists and downtown workers hit hardest.

Tourism to federal destinations in the region can take a serious hit, too. The Smithsonian museums were forced to close their doors once their reserves ran out in 2019, a major blow to local tourism. At the time, one local tour guide described the empty National Mall “borderline comatose.” And it has even included things like trash removal on the National Mall (usually maintained by the federal government; in 2019, the District stepped in to prevent it from piling up).

Complications for pandemic recovery

If the federal government shuts down again this fall, it will be a jolt to a regional economy already struggling to regain its post-pandemic footing. Local budgets are cash-strapped, and revenues from commercial office space are down.

Federal workers’ remote-work habits have increasingly become a point of focus in the recovery debate: local leaders have pushed for the federal government to require more in-person work, an approach the White House supports. That would bring employees and their spending back to downtown D.C. and other commercial areas throughout the region, a boon to businesses in

those areas. D.C.-area employees, for their part, take a dim view of limits on their newfound remote-work flexibility: one poll found two-thirds want to work remotely ‘most’ or ‘all of the time.’

The possible shutdown also comes as federal employment in the region — which grew dramatically during the COVID-19 response — begins to trend downward, with researchers at George Mason University’s Stephen Fuller Institute predicting a loss of 8,000 federal employees in the return to the pre-pandemic baseline.

“While the loss of these federal jobs will undoubtedly drag on the region’s economy, the value of a federal job to the region’s economy has been in question more broadly following the pandemic,” the researchers note. “The District has not enjoyed the economic benefits previously associated with federal workers commuting downtown, filling offices, and spending on leisure and hospitality as was the norm prior to the pandemic.”