"It is going to be very severe," said Rep. Jim Moran, D-Va. "Large contractors are going to be OK. They have a sufficient cash reserve. Small contractors are not. ... They are hanging on by their fingernails."
At least 800,000 federal employees are expected to be furloughed, the same as the 1995 shutdown. But unlike then, it's unclear whether they would receive back pay for the lost time.
"I have a very strong conclusion after talking with some of these guys there will be no reimbursement," Moran said today. If the shutdown is prolonged, "it is going to have a very severe impact upon federal employees' ability to make their mortgage payments, car payments, et cetera. ... This is very, very serious."
Members of Congress, however, will continue to be paid. Every lawmaker must decide which of their employees is considered essential and should be kept on staff while the government is shut.
President Obama today chided Republicans for not coming together on a deal, saying that he and Democrats agreed to the spending cuts the GOP originally asked for.
"We've agreed to a compromise but somehow we don't have a deal, because some folks are trying to inject politics in what should be a simple debate about how to pay our bills," the president said. "They're stuffing all kinds of issues in there: abortion and the environment, health care. You know, there's time to have those discussions but that time is not now."
Boehner and Senate Majority Leader Harry Reid, D-Nev., were meeting with Obama at the White House for the second day in a row this evening to hash out a deal.
A White House official said the goal at the White House meeting was not to reach a deal, just to get things back on track because negotiations "went off the rails" today.
Capitol Hill sources also felt major developments were unlikely at the White House, but offered a more optimistic take on the state of negotiations.
A top Republican said he was "much more optimistic" that a deal would be struck to avoid a shutdown.
A top Democrat put even odds on avoiding a shutdown, but added of negotiations, "We are pretty much there substantively."
The clock quickly is running out for lawmakers. Per House rules, legislation has to be posted 48 hours before a vote, which means the GOP leadership has until Thursday morning to post the bill.
Obama has pushed Boehner to sell the $33 billion in cuts Democrats say they originally negotiated with him. The speaker, they say, backed out because of pressure from Tea Party members and conservatives in his own caucus. Boehner said the two sides never agreed to that number, and he pushed for at least $40 billion in cuts Tuesday.
Tea Party-backed members of Congress want to stick to the $61 billion in cuts proposed in the original continuing resolution that passed on Feb. 19. The two short-term extensions that the House has passed in recent weeks cut a total of $10 billion.
The Office of Personnel Management has started planning for a shutdown, which last happened in 1996 under President Bill Clinton.
Under federal laws, essential staff still have to report to work, but all nonessential staff will be furloughed without pay. Furloughed staff are not allowed to work as unpaid volunteers to the government, enter their offices, use their work blackberries or computers, and access their work e-mail.