Government Shutdown Looming: What Does it Mean to You?

Feb. 21, 2011— -- With Democrats and Republicans at a stalemate over how to fund the government, just two weeks shy of the deadline, there's a real threat that the federal government could shut down for the first time in 15 years, affecting thousands of Americans.

The last time the federal government closed its doors was in 1995, when then-President Bill Clinton and the Republican-majority Congress failed to come to a compromise on the budget -- twice.

"Shutdown: A Passport to Confusion," "Tourists, Hunters and Shopkeepers Feel the Impact," screamed headlines at the time.

"A shutdown can be, depending on whose exempted or not, pretty significant to all of our lives, absolutely," said Howard Gleckman, a resident fellow at the Urban Institute. "People don't think about how much it is that the government does for them. There would be no planes if it weren't for TSA and air traffic controllers. And as far as Social Security, somebody actually has to run computers to make sure checks run."

The five-day government stoppage in 1995 caused delays in processing of Social Security, Medicare and veterans' checks.

While the postal service kept going, the shutdown significantly affected other key government services. Veterans' health and welfare services were caught in confusion. National museums and 368 national parks closed their doors; nine million visitors were turned away.

Hundreds of thousands of visa and passport applications went unprocessed as some passport agencies shut down while others operated with minimal staff. The shutdown also threatened to jeopardize a large chunk of programs for low-income Americans, and slowed down services.

New patients were not accepted into clinical research trials at the National Institute of Health, according to a report compiled in September by the Congressional Research Service. Toxic waste cleanup at hundreds of sites stopped. Testing and recruitment of certain federal law enforcement officers stopped.

Even the White House's daily activities were impacted. The Secret Service had to take President Clinton's bullet-proof limousine to a public car wash because workers responsible for cleaning it were on forced furlough, recalls ABC News White House correspondent Ann Compton.

When the government shuts down, it is forbidden by law to accept the services of its employees and to pay them, except those who are considered absolutely essential. Members of Congress, the president and presidential appointees are exempted from that rule, as are defense forces.

During the five-day shutdown in November 1995, about 800,000 "non-essential" employees were sent home, even though they were eventually paid retroactively. The stalemate cost the government an estimated $750 million and dealt a huge political blow to the Republican leadership.

A longer, 21-day partial shutdown -- the longest in history -- followed at the end of that year and ran into 1996. About 284,000 workers were furloughed.

The government could have a repeat scenario on March 4, if Republicans and Democrats can't find common ground on a continuing resolution to fund the government until October, when the fiscal year ends.

How a Government Shutdown Will Impact Your Bottomline

"It was a similar situation as we have now. We had a Democratic president who had lost his majority -- in that case -- in Congress in general, in this case in the House," said Alan Auerbach, director of the Burch Center for Tax Policy and Public Finance at the University of California, Berkeley. "In both cases you had a Republican leadership in the House that felt it had a very strong mandate and wanted to take a divergent path from the White House."

The issues today, however, are vastly different. The country faces a much bigger deficit and economic crisis.

There's also the Tea Party's influence. Many of its leaders are calling for a government shutdown to send a signal to the Obama administration. That is a challenge for Republican leaders, who walk a fine line between challenging the president on spending and looking as if they are letting government services come to a halt.

In 1995, the Republicans, led by then-House Speaker Newt Gingrich, took much of the public blame and suffered a major political setback.

Gingrich's disapproval rating surged to 65 percent during the budget battle with Clinton, while the president's own approval rating surged to 53 percent, the highest it had been in two years, according to a Gallup poll.

In today's climate, both parties, and Obama, are likely to take the blame.

"In 1995, the Clinton people succeeded very well in making that government shutdown look like an act of petulance by Newt Gingrich," Gleckman said. "The Clinton people were masterful at that. I'm not sure that Obama either has the political skill or the interest in playing that kind of a game."

The debate highlights vast political and ideological differences over the federal budget. Congress last year failed to come together on a 2011 budget and has been operating on the 2010 budget, funding government through continuing resolutions that need to be extended every few months.

Lawmakers narrowly averted a shutdown at the end of last year and the lack of resolution on a budget has stalled several research projects and new initiatives.

Democrats and Republicans are likely to come together eventually on a budget to avoid public backlash, but it is likely to happen after much political drama.

"Whatever got us here is a big poker game," Gleckman said. "They are going to play out this hand of poker until the last card, and I suspect in the end they will come to some agreement."