State workers, companies brace for possible federal shutdown

Stakes are high in Maryland, with an outsized share of government work

February 28, 2011|By Jamie Smith Hopkins and Andrea K. Walker, The Baltimore Sun

A compromise brewing in Congress could delay a possible government shutdown until mid-March, but anxiety remains high among federal workers and contractors in Maryland — one of the states most dependent on federal spending.

Because Congress has not yet agreed on a budget for the fiscal year that started five months ago, the government is operating on temporary spending authority — and that runs out on Friday.

Republicans worked on Monday to persuade Democrats to accept a proposal to trim $4 billion over the next two weeks by eliminating programs that President Barack Obama also has targeted. The compromise could postpone a possible shutdown of many government services from Friday to March 18.

The Republican-controlled House is scheduled to vote on the measure on Tuesday. The Senate is expected to pass the measure afterward.

In the meantime, federal agencies are rushing to determine which employees would remain at work — those considered essential to protecting life and property — and which would be sent home if the budget-cutting battle is not resolved. Businesses that provide the government's goods and services are trying to figure out how they would absorb the financial hit and what to do with their own employees. And workers are wondering how long they would have to go without a paycheck.

Answers are hard to come by. Across the country, citizens are being bombarded with conflicting information about whether new applications for Social Security would be processed, what would happen to eagerly anticipated tax refunds and which government offices would close their doors.

"A lot of services just go by the wayside," said Mark Amtower, a consultant in Howard County who helps companies do business with the federal government, and who has no fond memories of the last shutdowns, at the end of 1995 and beginning of 1996. "Any way you look at it, it's a mess."

The congressional compromise in the works includes budget reductions that are fairly easy for both sides to agree on. But the House's overall budget proposal is aimed at reining in the huge federal deficit with more than $60 billion in cuts. The Democrat-controlled Senate has balked, saying such a decrease would gut services for vulnerable Americans and hurt the economic recovery. President Obama says he would veto that budget if approved.

The stakes are higher here than in most states. Maryland ranked fourth in the nation for per-capita federal spending in fiscal year 2009, the most recent government data. And it's a procurement powerhouse, with businesses in the state raking in more than $34 billion that year in federal contracting dollars.

Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute, estimates that 15 percent to 20 percent of Maryland's economy can be traced to federal spending on wages and contracting.

A shutdown would not be catastrophic, he said. But paired with the likelihood of budget cuts to follow, it would not be good news for the state. "This takes the wind out of the recovery here in Maryland," Clinch said.

Crystal Edwards of Glen Burnie, who has worked for the Department of Defense since 2006, is dreading a government shutdown. Many Department of Defense employees are probably exempt from furlough, as so-called "essential" workers, but at least some of the agency's civilian employees are not.

"A lot of people are anxious because they don't know what is going on," said Edwards, 35, a human resources manager. "Everybody is asking if they are essential and what makes an employee essential."

It also hasn't been decided if workers would receive back pay for the days they miss. They did after past shutdowns, but that's not required under federal law.

"We have people who may not be able to afford to stay home for two weeks or whatever they decide," said Edwards, who works in Alexandria, Va.

Agencies must have shutdown plans, but many are tight-lipped about how they are preparing for a shutdown and what services would continue.

Officials at Fort Meade and Aberdeen Proving Ground, major Army installations in the Baltimore region that both have a largely civilian employee base, said they have no information to share because the Department of Defense has not offered them any guidance. The Internal Revenue Service, asked about tax returns and refunds, referred questions to other agencies. The Woodlawn-based Social Security Administration, which employs 12,700 in Maryland, did not return calls.

"We had a meeting [Monday] and we learned nothing," said Witold Skwierczynski, head of an American Federation of Government Employees bargaining unit that represents most Social Security employees. "We learned that supposedly the agency hasn't decided in a government shutdown who they're going to declare essential and nonessential. … They haven't decided if they're going to close offices, keep a partial staff, close one day a week, close consecutive days — nothing."

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