Fact Sheet: A Republican Shutdown Would Hurt Iowa’s Economy and Middle Class PDF Print E-mail
News Releases - Business, Economy & Finance
Written by Brian Jennings   
Tuesday, 01 October 2013 12:40

A Shutdown Would Slam Middle-Class Families and Small Businesses

A shutdown could delay financial support for Iowa’s small businesses. In FY2012, the SBA’s flagship 7(a) and 504 loans programs approved 53,847 applications and supported 571,383 jobs, for an average of just over 1,000 applications per week. A shut down would put a stop to this critical source of small business credit until the government resumes operation. According to the SBA, Iowa is home to 61,633 small businesses. [Small Business Administration FY14 Budget Justification; SBA]

A shutdown could delay military pay and hurt military families in Iowa. The Department of Defense estimates that during a shutdown nearly half of the civilian workforce would be sent home without pay, while the rest would continue to work for delayed pay, impacting the 1,603 civilian workers in Iowa. 12,480 servicemembers in Iowa would remain on duty, but would see their pay delayed if the shutdown extends for more than 10 days. Military members, veterans, retirees, and their families are on pace to redeem more than $100 million in Supplemental Nutrition Assistance Program benefits this year and many service members, especially the most junior, live paycheck to paycheck. [Military.com, 9/20/13; Huffington Post, 6/19/13; DoD]

A shutdown could put 9,000 federal employees in Iowa out of work. Federal employees around the country would potentially be furloughed in the event of a government shutdown. These workers may see reductions in their pay from the time they were forced to stay home because the government was shuttered. [Census; Washington Post, 9/23/13]

Possible Additional Consequences of a Government Shutdown

Many federal agencies are still attempting to determine exactly how a shutdown would impact their programs and operations. The following are consequences of previous government shutdowns that may or may not come to pass in a future shutdown.

Social Security checks for new seniors. Although checks for current Social Security benefits would still go out during a shutdown, applications for new benefits would be delayed and services for seniors could be significantly curtailed. As a result of furloughs and service cuts during the last shutdown, 112,000 claims for Social Security and disability benefits were not be taken, 212,000 applications for Social Security Numbers were not taken, and 800,000 callers were denied service on the Social Security Administration’s 800  number. In 2012, 600,699 people received Social Security benefits in Iowa. [SSA History; SAA, 2012]

Veterans benefits. New veterans’ educational, compensation and pension benefits processing could be delayed. During the 1995-96 shutdowns, more than 400,000 veterans saw their disability benefits and pension claims delayed, while educational benefits were delayed for 170,000 veterans. Iowa has 233,815 veterans. [Army Times, 2/3/11; CNN, 1/4/96; VA]

School readiness. A government shutdown could force Head Start centers around the country to close. During FY12, an estimated 1,600 Head Start agencies served over 950,000 children, including 8,133 children in Iowa. [CAP, 4/11; HHS; CRS, 1/9/13]
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