Current Date: Tue, 11 Mar 2014 10:01:27 -0400
On Thursday, 2,200 N.C. Department of Health and Human Services employees had something they hadn’t had in more than two weeks — a normal day of work.
The partial federal government shutdown ended last week, amid the possibility that the government could have defaulted on its debt, after President Barack Obama signed a bill to reopen the government and raise the debt ceiling. The bill will fund the government through Jan. 15.
As part of the deal, furloughed employees will receive full salary for the time they were out of work, said Roy Cordato, vice president for research at the conservative John Locke Foundation.
He said this means there won’t be any long-term economic impacts of the shutdown, only short-term confusion for some federal workers.
But Alexandra Sirota, director of the Budget and Tax Center at the N.C. Justice Center, said the shutdown will have lasting effects on some N.C. citizens.
Some federal child care subsidies were suspended or partially defunded during the shutdown.
“Obviously when a parent who works doesn’t have child care they have to stop working to take care of that child, and that has an impact — not just on the family’s wages, but on the employer’s ability to keep doing their work,” she said.
During the shutdown, North Carolina stopped issuing vouchers through the Women, Infants and Children program for three days before finding alternate funds to reinstate the program.
North Carolina also suspended the processing of new applicants for the state’s Temporary Assistance for Needy Families program — called Work First — which provides cash aid to thousands of needy families in the state.
Families already in the program continued to receive benefits. Still, Sirota said it was important for the program to be able to accept new applicants, given that Work First is a last resort for most families and almost two-thirds of its cases are children.
She said that North Carolina had state money to fund Work First and process new applications, but chose not to because state officials were concerned that the federal government wouldn’t reimburse the state.
“It really was a short-sided decision on the part of our state policymakers that has created some undue harm and hardship for many families,” Sirota said.
Families and federal employees affected by the shutdown could experience a similar situation in January when the deal expires, said Mike Walden, an economics professor at N.C. State University.
“This is not a permanent deal. This is a Band-Aid,” Walden said.
He said while the shutdown was not ideal, defaulting on loans would have had more serious economic impacts.
“You do not want to put the country in a situation where they potentially can’t pay interest to the holders of the national debt,” Walden said.
But he said he thinks another shutdown in January is less likely.
“The public did not approve at all of the shutdown, so my guess is that when this is revisited next time, the chances of another shutdown would be significantly reduced.”