Berkshires to feel minimal impact from looming government shutdown
PITTSFIELD -- With Congress still divided over spending heading into this weekend, it's still possible that the federal government will partially shut down on Tuesday.
If it does, the impact on Berkshire County should be minimal, people with knowledge of the local economy and services say.
The shutdown will affect federal government agencies and programs that rely on annual funding appropriations made by Congress that are scheduled to go into effect on Tuesday, which is the start of the federal government's new fiscal year.
When a shutdown occurs, the federal agencies that rely on those appropriations are required to stop all non-essential discretionary functions until the new funding is approved, according to the Committee for a Responsible Federal Budget.
However, essential services, such as law enforcement, and inpatient medical care, will continue to operate. So will mandatory spending on initiatives like Social Security, Medicare and Medicaid, according to the committee.
Steve Cunningham, the chief economist at the American Institute of Economic Research in Great Barrington, said he doubts a federal government shutdown will have a visible impact on the local economy. The federal building on Center Street will remain open, according to the building's security guards.
"The actual choice of programs to cut in the face of these problems is almost entirely a political choice," said Cunningham. "If the president wants to make it painful to raise attention, he could make it in places that affect the public. If he's trying to minimize the damage he could do some things that are less obvious.
"There could be some furloughs of government employees that could affect employees in this area. They really can't go after Social Security, although the payments could be delayed. They have an array of expenditures that they can choose from."
When it come to private investment, the deadline for the federal government to exceed the debt ceiling on Oct. 17 is more relevant to the financial markets than a possible government shutdown.
"With the shutdown you're getting some nervous nellies and weak-kneed investors who are selling ahead of time," said William Schmick, a portfolio manager at Berkshire Money Management in Pittsfield. He noted that the federal government has shut down 17 times since 1976.
"[But] we're in virgin territory with the debt ceiling," Schmick said. "We've never seen anyone default on $16 trillion in debt."
State Sen. Benjamin B. Downing, D-Pittsfield, said the shutdown could further affect federally funded programs in this area like HeadStart, that have already been impacted by the sequester. It's also possible that people seeking to appeal decisions regarding Social Security or Medicare benefits with the federal legislature could be affected, especially if the local offices that deal with those federal initiatives close down.
According to the Committee for a Responsible Budget, Social Security and Medicare checks will still be sent out, but new applicants will likely not have their applications processed until the funding resumes.
Other federal agencies that could be affected by a shutdown are the Bureau of Alcohol, Tobacco and Firearms, which processes firearms applications, and the Environmental Protection Agency.
On the state level, it's unclear how the shutdown will affect those receiving unemployment compensation. Local labor officials referred all inquiries to the state level. Lauren Jones, a spokeswoman for the state Executive Office of Labor and Workforce Development, said her office is currently monitoring the situation in Washington, but declined to comment further.
In Pittsfield, Mayor Daniel L. Bianchi said local government services will not be affected initially, but if the shutdown drags on it could affect some of the city's Community Development programs that receive federal funding.
The city's current fiscal year began three months ago on July 1. Although Pittsfield does receive federal funding for other local programs, Bianchi said there are no pending appropriations that would be affected if a shutdown were to occur.
"I wouldn't anticipate any impacts," he said.
Director of Veterans Services Roseanne M. Frieri said the shutdown should not impact programs for military veterans that are normally run out of her office.
A shutdown will not affect mail delivery in Berkshire County, said U.S. Postal Service spokeswoman Maureen Marion.
"It's considered an essential service," she said.
The shutdown is expected to affect employers who receive defense contracts from the federal government, like General Dynamics Information Systems. Jessica Howe, a spokeswoman for General Dynamics, also declined to comment.
"For us, it wouldn't be appropriate to speculate on the effects of a government shutdown," Howe said.
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Inside the shutdown
Some of the programs that could be affected if the federal government partially shuts down:
Social Security/Medicare: Checks will be sent out, but new applicants likely will not have their applications processed until funding resumes.
Law enforcement: Public safety generally continues to be funded, but some functions are delayed, like the hiring of law enforcement officers, and delinquent child support cases.
National parks: When the federal government shut down in 1995, the National Park Service turned away 9 million visitors to more than 350 national parks and monuments.
Passport processing: All passport processing employees will be sent home during a shutdown.
Federal Housing Administration: If a shutdown occurs, the FHA, which guarantees many mortgages, would not be able to guarantee housing loans.
Source: Committee for a Responsible Federal Budget
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