THE BUDGET STALEMATE : Shutdown Fails to Slow Down Government’s Money Machines

The budget dispute may have closed two-thirds of the Cabinet agencies, stopped the paychecks of federal workers and led to the closure of national parks, but rest assured, the problem is not a shortage of money.

There is still $389 billion in greenbacks circulating around the world--13 times more than was in circulation 40 years ago--and every day $353 million in crisp new bills rolls off government printing presses. That is about twice the annual budget of the African nation of Djibouti.

“Crisis?” said Thomas Ferguson, assistant director of the Bureau of Engraving and Printing. “For us it’s as though the crisis didn’t happen. The government may be out of money, but we’re still printing lots of it.”

Indeed, the business of making the nation’s money hasn’t taken a hit at all in the 19-day partial government shutdown: No layoffs, no furloughed workers, no lost shifts or reduced production, thanks to congressional passage and presidential signature on the Treasury Department’s appropriations bill.

Wednesday, while State Department employees protested the shutdown in front of their headquarters, about 50 tourists gathered at the bureau. Tour guide Kendhe Deligny greeted them and led them into the bowels of the building where pallets were stacked with $6.4 million each, in just-off-the-press, plastic-wrapped packets of $100 bills.

“I was wondering if you’d be open,” a tourist from Illinois said. “The Smithsonian, the Lincoln Memorial, everything else we’ve tried [has] been closed.”

“Oh, sure,” Deligny replied. “We never close.”

Which is no exaggeration. With a payroll of 1,800, the bureau works 24 hours a day, seven days a week, churning out money--ordered by the Federal Reserve System a year in advance--on 14 high-speed presses. Currency is also printed at the Western Currency Facility in Fort Worth, Texas, which operates two shifts, five days a week.

It is a recession-proof, foolproof business whose product line of $1, $5, $10, $20, $50 and $100 bills keeps expanding by about 4% each year.

The two plants are the legacy of what began on Aug. 29, 1862, when two men and four women in the basement of the Main Treasury Building began separating and sealing by hand the $1 and $2 bills that had been printed by private bank note companies. The Treasury started issuing paper currency that year as a result of a shortage of coins and the need to finance the Civil War.

On the bureau’s production floor, amid 50-gallon barrels of ink, piles of blank cotton-and-linen paper, supplied for over 100 years by the Crane Co. of Dalton, Mass., stand by the presses, soon to be turned into the neatly wrapped packets that will be transported by shotgun-toting guards in armored vehicles to the nation’s 13 Federal Reserve banks. Lest anyone thinks that printing $353 million in new bills a day is inflationary, tour guides like Deligny are quick to point out that 95% of the fresh currency is used to replace existing bills that have become worn. The life expectancy of a $1 bill is about 18 months; a $100 bill about nine years.

One of the reasons U.S. money has become the currency of the world--taxicab meters, for instance, tick off the fares in Hanoi in U.S. currency, and tourists barter in Cairo’s souk for goods priced in U.S. dollars--is because although the federal government may replace frayed bills, it has never recalled or devalued any bill.

Even though $100,000 notes have not been printed since 1935 and $10,000 bills since 1969, both are still honored at face value if presented to the government for collection. The $100 bill--which is being altered in design this year to deter counterfeiters--is the largest denomination still printed.

The introduction of automated teller machines at banks in the 1970s created a new--and growing demand--for currency. Despite the talk of the advent of a cashless society, Ferguson has a safe prediction: Budget crisis or not, the government’s money-making printing machines will continue to operate around the clock.