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OMB: Shutdown cost $2 billion in lost pay

Nov. 7, 2013 - 05:51PM   |  
By SEAN REILLY   |   Comments

Last month’s partial government shutdown cost an estimated $2 billion in pay for furloughed federal employees and hindered everything from collection of park receipts to shipping liquor overseas, according to an Office of Management and Budget report released Thursday.

By OMB’s count, about 850,000 employees — or about 40 percent of the total — were furloughed at the peak of the 16-day shutdown, although close to half were brought back to work within a few days after Congress allowed the Defense Department to recall most workers who had initially been sent home without pay.

In agreeing to reopen the government, Congress also gave furloughed employees back pay for their forced time off. The resulting $2 billion in lost productivity represented one of the shutdown’s biggest effects, OMB Director Sylvia Burwell said in a conference call with reporters

That number, based on the average salary by department, does not include thousands of man-hours that federal employees spent in preparing for the shutdown and later to reopen their agencies. It represents the first official attempt to quantify the shutdown’s impact on the federal workforce. The government will also owe interest on billions of dollars of payments that could not be made during the shutdown. At this point, OMB does not have a figure on that cost, Burwell said.

“That will happen on a contract by contract basis in each of the departments,” she said.

The shutdown was triggered by lawmakers’ failure to pass a stop-gap spending bill by the Oct. 1 start of fiscal 2014; the continuing resolution that allowed the government to reopen runs until Jan. 15, potentially setting the stage for another showdown.

The OMB report also furnishes an overview of the shutdown’s impact on a wide swath of government operations. Because a Treasury Department trade bureau was unable to issue export certificates, for example, more than 2 million liters of beer, wine and distilled liquor were temporarily marooned at U.S. ports, unable to ship. The National Park Service estimated that it lost about $7 million in fee revenue, while the Smithsonian Institution pegged its losses at about $4 million. Among other repercussions, according to the report:

■The IRS couldn’t continue most enforcement activities that typically collect about $1 billion per week.

■The National Nuclear Security Administration, a part of the Energy Department, had to spend time and money putting nuclear weapons labs into safe standby condition, only to resume normal operations soon after.

■The National Institutes of Health was unable to enroll hundreds of patients in clinical medical trials.

Burwell disagreed, however, with the premise that the effects went mostly unnoticed. One benefit, she said, is that it prompted “a greater appreciation” for what government does.■

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