As noted in the December 21, 2018, Week In Review, the federal government partially shut down at midnight on that date because several appropriations bills that fund parts of the government have not been enacted into law.

Affected by the partial shutdown are the Departments of Agriculture, Commerce, Health and Human Services, Homeland Security, Interior, Justice, State, and Transportation. In addition, some independent agencies like the Environmental Protection Agency (EPA), Small Business Administration (SBA) and Smithsonian Institution are also affected.

Eighty-seven percent of employees at the Department of Homeland Security (DHS) are exempt from a lapse in government funding. Most of the department, including Customs and Border Protection, Immigration and Customs Enforcement, Federal Emergency Management Agency and the Transportation Security Administration, are considered essential personnel, and so continue to work even under a shutdown. Salaries at U.S. Citizenship and Immigration Services are funded by fees paid by visa applicants and immigrant petitioners.

However, the E-Verify system, administered by DHS, which screens new employees for their eligibility to work in the US is offline due to the shutdown.  “Due to the lapse in federal funding … E- Verify and E-Verify services are unavailable” reads a message on the E-Verify website.

The Internal Revenue Service (IRS) is expected to furlough about 52,000 employees. The IRS Lapsed Appropriations Contingency Plan notes that the issuance of refunds, audit and exam functions will be suspended and IRS personnel responsible for answering taxpayer questions would be furloughed.

Processing of loans from the SBA will be delayed.

Despite a department or agency not having its funding bill enacted, not all of functions of those organizations are stopped. Some government services are funded by user fees, mandatory appropriations, and multi-year discretionary funding rather than through annual appropriations bills. Those activities, as well as those that are related to law enforcement and the protection of life and property, continue during a shutdown.

For example, the U.S. Department of Agriculture Lapse in Funding Plans notes that among the functions that would continue during the shutdown include:

Inspections for import and export activities to prevent the introduction and dissemination of pests into and out of the country.

Continuity and maintenance of some research measurements and research-related infrastructure such as germplasm, seed storage, and greenhouses.

President Trump met with congressional leaders this week to discuss options to reach an agreement on funding the government but insisted on including $5 billion for a wall on the southern border, which is opposed by Democrats. The disagreement on the border wall funding is at the center of the current impasse.

Once the 116th Congress was seated on Thursday, Speaker of the House Nancy Pelosi (D-CA) brought a package to the floor that would fully fund all currently closed departments and agencies for the remainder of the fiscal year except for DHS. That department would be funded through early February, but the funding package did not include money for the border wall demanded by President Trump. The package was approved by the Democratic-majority House.

Senate Majority Leader Mitch McConnell has said that the Senate would not hold any votes on government funding legislation until President Donald Trump and Democrats reach an agreement. Since there appears to be no agreement on the bill passed by the House, at press time there appears to be little chance of it being considered by the Senate.

Please let SAF know if the federal government shutdown has impacted your business.