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Contingency plan for possible government shutdown packs a mean punch

Confronting the prospect of failure in last-ditch budget talks, federal officials have prepared plans to furlough about 800,000 employees, freeze the processing of some income tax refunds and suspend pay for the military as part of the impending government shutdown.

Administration officials detailed the shutdown plans Wednesday, emphasizing their hopes that Congress and the White House would reach a compromise on spending before a midnight deadline Friday.

Still, the backup plans were necessary "from a good government, good housekeeping perspective," said a senior administration official who spoke on condition of anonymity when detailing internal planning.

The contingency plans described a government that would be hobbled, though not halted completely. Social Security checks would still arrive, but new claims could be delayed. Medicare and veterans' benefits would still be paid.

The Internal Revenue Service, in its peak season, would be unable to process paper tax filings, but that would not mean taxpayers could avoid the April 18 deadline. Some environmental cleanup would cease. National parks and the Smithsonian museums would be closed. Washington's annual cherry blossom parade stands to be canceled.

The preparations come as lawmakers debate how much to cut from federal spending in the remaining six months of the 2011 fiscal year, a fight that is political as well as financial. Democrats have offered an agreement based on $33 billion in cuts, the largest spending reduction in generations. But Republicans want more and also want to ensure the cuts hit at top Obama administration priorities.

If talks fail, a shutdown — the first in 15 years — would resound across the country. Airlines, roads, hospitals, schools, food and tourism all have contact with a federal employee who may not be working next week.

The standard used to determine who remains working is whether an employee or agency is "necessary for safety of life or protection of property."

That means air traffic controllers would stay on the job and federal prisons would operate as usual. Food inspections and border surveillance would continue, as would inspections of nuclear power plants and radiation monitoring, prompted by the Japan nuclear crisis, according to a second administration official.

The federal school lunch program would continue.

Federal law enforcement agencies would be up and running, and many in the military would still be working. Those employees, however, wouldn't be paid for their work until a bill is passed.

"They will be paid once we have money again to pay them," the first senior administration official said.

If a shutdown lasts only a few days, most in the military would receive their full paycheck April 15, officials said. But if a shutdown lasts beyond the mid-April pay period, they would get about half of their check on April 15 and have to wait until the next pay period for the rest.

The burden on military families, at a time when troops are deployed on three fronts, was a pointed reminder of how a 2011 shutdown could be markedly different from its infamous predecessors in 1995 and 1996.

Those two shutdowns — a result of a standoff between then-Republican House Speaker Newt Gingrich and Democratic President Clinton — came during a time of relative peace and general prosperity.

Today's battle comes as the economy is still climbing out of the doldrums and as financially strapped states have less ability to fill in for shortfalls in federal funding.

The senior administration official pointed to the potential effects on the shaky recovery. New small-business loans would be held up, along with new mortgage guarantees from the Federal Housing Administration.

FHA backs a third of all home mortgages in the U.S. With a fragile market, a freeze during the springtime home-buying season "will have a significant impact," the official said.

The question of how disruptive a federal shutdown would be depends largely on how long it lasts. White House officials said Medicare could handle payouts for a matter of months. Federal courts can operate on money from other sources — court fees, largely — for 10 working days. After that, each district would have to decide how to keep the cases moving.

"It gets a little iffy if a shutdown were to last more than two weeks," said Dick Carelli, spokesman for the Administrative Office of the U.S. Courts.

The unknown has lawmakers starting to ring alarm bells, particularly those from districts containing large numbers of federal employees.

"I'm afraid that the lights will go out. I'm afraid that government agencies will be shuttered. I'm concerned that people who work on behalf of the federal government as contractors — small- and medium-sized contractors, disabled veteran contractors — will not get paid," said Sen. Barbara Mikulski (D-Md.), who added that she represented more than 130,000 federal employees.

As a separate branch of government, Congress has its own shutdown plan, which defines an essential employee as someone who helps lawmakers "perform their constitutional duties." That definition includes the elevator operators in the Senate, but not employees at the House staff gym.

"They're just toying with the lives of federal employees," said Daniel Sobien, a weather forecaster in Tampa, Fla., and president of the National Weather Service Employees Organization, who described himself as angry that some Republicans are calling for a shutdown.

Like Sobien, 85% of the nearly 2 million federal workers live outside the Washington area, and often in communities where federal prisons, military bases, hospitals and parks anchor the local economy. About 800,000 people visit national parks on an average April day, and that tourism generates $32 million a day to local economies, the National Park Service said.

Shutting down places like Yosemite during a busy season is not as simple as hanging a sign. People already camping or hiking in the park would be given 24 to 48 hours to hike out. People just starting their trip could be left hanging.

"We're getting those calls now — 'What am I supposed to do? I have hotel reservations and airline tickets for next week' — and we can't really advise anybody on what to do on this point," said David Barna, a spokesman for National Park Service.

The same question mark is hanging over the 150th anniversary of the firing on Ft. Sumter in Charleston, S.C. After 18 months of planning, organizer Jeff Antley is expecting 1,000 Civil War reenactors from around the world.

But about half of the program is on national parkland and may need to be moved if Congress doesn't sort out its political battle.

Antley said he was undaunted. One way or another, "the show will go on," he said.

kathleen.hennessey@latimes.com

richard.simon@latimes.com

julie.mianecki@latimes.com

Michael A. Memoli in the Washington bureau contributed to this report.

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