Shutdown Would Cost More Than Business as Usual : Budget: A 1990 study found that a three-day closing of the federal government could be $600 million more expensive than staying open.


If you thought the looming government shutdown might save some money, think again. In fact, a brief closing would turn out to be more expensive than business as usual.

The chances of a government shutdown by Tuesday grew over the weekend as the White House and congressional leaders continued to hurtle toward a budgetary showdown.

Unless the two sides agree on a temporary funding measure, most of the government will run out of spending authority by midnight tonight and will be forced to begin closing most nonessential operations, furloughing about 800,000 employees, or some 40% of federal civilian workers.

This could turn out to be an expensive political tempest. A study of the costs of government shutdowns, conducted after the last one in 1990, found that a three-day closing could cost the government as much as $600 million more than if it just continued normal operations.

Government shutdowns have become a semi-regular rite of Washington's partisan budget wars in recent years. Four "disruptions in federal services" occurred in the 1980s and early 1990s.

The last shutdown came in the fall of 1990 in the midst of the bitter fight between then-President George Bush and the Democratic Congress over the 1990 budget agreement. Before reaching a compromise on a budget accord that was supposed to last for five years, the two sides allowed the government to close for three days over the Columbus Day holiday weekend rather than give in.

That shutdown did not cost much because it came over a holiday weekend when most federal workers would not have been on the job anyway. But in 1991, the General Accounting Office did a study to estimate the financial consequences of a three-day closing during a workweek.

The study estimated that the costs of a three-day shutdown would range from $244.6 million to $607.3 million. The size of the loss would depend on whether many of the government's revenue-collecting agencies were included in the shutdown, the GAO found.

As much as $362.7 million in revenues collected by 10 agencies could be lost in just three days, with $330 million of that coming from uncollected tax revenues at the Internal Revenue Service.

In past shutdowns, the government has paid workers retroactively for days lost, and this time both House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Bob Dole (R-Kan.) have already said they do not want to punish federal workers for the standoff. In addition, the government will have a legal obligation to pay the 1.1 million workers who are expected to remain on the job even though there will temporarily be no funds to pay them.

"Closing the government clearly costs more money than running the government on a normal basis," Larry Haas, a spokesman for the Office of Management and Budget, said Sunday.

One oddity of this year's budget showdown is that all employees of the Agriculture Department--whether "essential" or not--will be expected to report to work Tuesday even if the rest of the government is shut.

That is because the Agriculture Department is the only federal agency that has received its full funding for fiscal year 1996, which began Oct. 1. Only two of the 13 main funding measures for next year have been signed into law by President Clinton: one for Agriculture, the other for construction projects on military bases.

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