White House Warns of Shutdown Consequences

BY Quinn Bowman  April 6, 2011 at 12:58 PM EDT


The White House Office of Management and Budget warned Wednesday that a failure by Congress to appropriate money to fund the federal government before midnight on Friday would have a direct impact on the economy.

According to a senior administration official, approximately 800,000 federal workers could be furloughed, members of the military would not receive paychecks (but still earn pay) and all national parks and the Smithsonian museums would be closed, among other consequences.

OMB was quick to point out the immediate economic impact of a possible shutdown, specifically that the Internal Revenue Service would suspend processing of paper-filed tax returns, the Small Business Administration would suspend approval of direct small business loans and loan guarantees, and that the Federal Housing Authority would halt new loan guarantees.

Only federal services that are “necessary for the safety of life and protection of property” would remain operating under a shutdown situation, according to the official. Washington’s popular Cherry Blossom parade would also not happen this weekend, the official added.

The warning comes as leaders in Congress are running out of time to agree on a short-term spending measure to keep the government funded until October 2011. House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., met with President Obama at the White House yesterday to discuss how to come to an agreement, and afterward Reid and Boehner met again in Boehner’s office in the Capitol.

President Obama also spoke with Boehner Wednesday morning. Boehner told the president that the goal of the House was to prevent a shutdown while also making real spending cuts, and that he is hopeful a deal can be reached and that talks would continue, according to Boehner’s office

Separating the two sides is approximately $30 billion – House Republicans want to cut $61 billion from current spending levels, while Democrats in the Senate and White House have proposed about $33 billion in cuts.

The House Republican Conference is planning to meet at 2 p.m. Wednesday in the Capitol with Speaker Boehner. The results of that meeting, with the deadline just two days away, could give an indication as to whether a last-minute deal is possible.

Updated: Watch video of Boehner’s press conference here.

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