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Signals from Washington that a threatened federal shutdown will be averted, for now, came as good news after partisan disagreements threatened to send an already fragile economy into a tailspin. In the Kansas City metro area, where more than 28,000 federal employees live and work, a shutdown would’ve meant thousands of furloughs and missed paychecks.
But avoiding a shutdown now doesn’t mean the threat has gone away. Republican refusal in Congress to raise or suspend the U.S. debt ceiling means another standoff could be coming soon. Stephen Pruitt, a professor of business economics and finance at the University of Missouri-Kansas City, said partisan divides make future standoffs nearly inevitable.
Kansas City’s largest employer
Kansas City, Missouri, made headlines in 2019 after then-President Donald Trump ordered the U.S. Department of Agriculture to move its headquarters from Washington, D.C., to the city of fountains. But the area has long held a wealth of federal offices.
The IRS, Environmental Protection Agency, FBI and Small Business Administration all have district offices in the metro area. The Office of Management and Budget began sounding the alarm last week and encouraging agencies to prepare for a potential shutdown. Some, like the IRS, released a plan for how to handle a delay in expected appropriations.
Unions representing KC federal workers also began advocating for lawmakers to come to a compromise before a shutdown was triggered. The American Federation of Government Employees, which has multiple chapters here, urged Congress to find a solution and pointed to the financial ramifications of the last shutdown in 2018-19.
“It was less than two years ago that 800,000 federal workers went five weeks without a paycheck during the longest government shutdown in U.S. history,” AFGE said in a statement. “That shutdown cost the U.S. economy $11 billion — $3 billion of which was never recovered — and caused needless hardships to federal workers who were unable to pay their bills or afford groceries for weeks.”
The National Treasury Employees Union, which represents IRS workers, set up an online letter generator to help people contact their legislators about the issue.
Some Kansas City federal employers would go about business as usual, at least initially. The Kansas City FBI field office, and others like it, would continue operating as normal, said agency outreach specialist Bridget Patton.
The Federal Reserve Bank of Kansas City, despite its status as a “quasi-government” organization, is not considered part of the federal government and is not a part of the congressional appropriations process, said Bill Medley, a Federal Reserve spokesman. Its staffing and operations would be unaffected by a shutdown.
The IRS, in contrast, would feel the impacts of a shutdown strongly. During the 2018-19 shutdown, Kansas City IRS workers staged protests as their furloughs dragged on, and several said they had to get other jobs to pay bills.
Pruitt said families with one parent who works outside of the federal government would likely be able to weather the storm without long-term effects. Families that rely exclusively on federal jobs, however, could see their income disappear overnight.
Twelve parts of the federal government must be funded annually, through separate accounts, Pruitt said. Resolutions to do so have to be passed individually, but they can also be lumped into an omnibus bill, a practice that isn’t always popular across the political aisle.
He also pointed toward polarization caused and encouraged by social media and cable news.
“The real issue is that we’re so partisanly fractured, these shutdowns will continue,” Pruitt said. “This is politics playing out on an economic stage, and that’s not a good mix.”
An unwillingness to compromise, particularly on a tight deadline, will lead to more shutdowns, he said. And so long as the government continues to spend and rack up debt, the situation will continue to worsen.
“People run their finances a whole lot better than the government,” Pruitt said. “Spending right now is out of control.”