How the Federal Government Shutdown Affects California

October 15, 2013

While the Republicans and the Democrats battle it out in Washington, DC, we are now starting week 3 of the federal government in shutdown, and its effects are rippling throughout the country.

Here’s some ways the shutdown is affecting California in particular:

Farmers and Growers

Government agencies have suspended timber harvesting in 150 National Forests, including the 18 in California. If the shutdown lasts very long, the last month of the harvesting season could be lost, which will impact sawmills and lumber retailers later in the year.

The Department of Agriculture no longer issues its daily commodity forecasts, which farmers rely extensively on for decision-making.

USDA loans and other federal financial assistance programs are stalled, during the critical crop-harvesting season. Many farmers have exhausted their lines of credit during the production season, and rely on short-term loans during harvesting to get them through until the crops can be transported and sold.

Small Businesses

The Small Business Association, which normally is in one of its busiest lending seasons of the year, is not lending. Lenders can continue to accept applications and work with borrowers to get thru the loan process, but they cannot actually obtain the SBA’s approval or disburse any funds.

Edwards Air Force Base

Most of the 8,500 civilian employees have been furloughed, as well as the 1,200 civil servants and contractors who work at the Dryden Flight Research Center which is located on the base. Area businesses which cater to these nearly ten thousand people now suffer from lack of customers.

National Parks

Of course, the whole nation heard about Yosemite being closed on its 123rd  birthday, but California boasts some terrific other national parks as well. Joshua Tree National Park, Sequoia and Redwood National Parks, and Death Valley National Park are all closed until further notice. Not only are the parks themselves closed, but all recreation-associated businesses, like hiking guides, boating, fishing, lodging, restaurants, are all being affected by the shutdown.

Homebuyers

Loans from the Federal Housing Administration (FHA) loans have all been put on hold. Anyone who was expecting to close has had that delayed. This could put some people in a very difficult situation, if they are leaving one place but will not be able to move into their new house.

On October 14th, the FHA Commissioner and Assistant Secretary for Housing, Carol Galante, issued a message: “FHA is … calling on all approved mortgagees and lenders to be sensitive to the hardships faced by borrowers as a result of the shutdown.”

Flying

Although all of the air-traffic controllers have been deemed essential and kept on the job, nearly 3000 airport safety-control workers have been furloughed. These are the people who inspect planes and pilots, and make sure everything is properly maintained. They also inspect repair service stations both in the United States and abroad, where planes are overhauled and maintained.

Seniors and Low-Income Mothers

While Social Security, Medicare and SNAP (Supplemental Nutritional Assistance Program) benefits are still going out, there are still some ways that seniors and low-income families can be affected by the shutdown.

The senior citizen program Meals on Wheels, which delivers hot meals to elderly shut-ins, has lost its federal funding. The program provides healthy meals to 2.5 million and is funded in the various states by complicated combinations of state, local and federal funds. In California, the Northern California MOW program will have to shut down in November, after sequester cuts already decimated the program’s reserves.

Low-income mothers have lost access to the WIC program, the federally funded Women, Infants and Children food assistance program, which provides funding for pregnant women and children up to the age of 5. Although the program is funded by $7 billion in federal money, the states administer the program themselves, and some have added local funds to keep current beneficiaries from going without. The California Department of Public Health is currently managing to deliver vouchers for the month of October, but is awaiting news from the US Department of Agriculture on November funding.

Food Safety

All of the food and safety inspectors from the USDA were furloughed, but they had to be recalled due to a salmonella outbreak across 18 states. The illlness affected at least 278 people, most of whom were in California. The Centers for Disease Control (CDC) was also understaffed for this emergency, with only two inspectors on duty at the time of the outbreak. 30 employees have been recalled to work on the situation.