Shutdown forecast: Week Two, and clouds ahead

Posted at 6:31 AM, Oct 08, 2013

By Z Byron Wolf

(CNN) — Tuesday marks the eighth day of the partial shutdown of the federal government, and there’s no end in sight.

President Barack Obama continues to refuse to negotiate with Republicans. They continue to insist that any government funding bill must somehow delay, defund or otherwise disrupt his signature health reform law.

What’s more, the issue of funding the government has now fused with the issue of raising the nation’s debt ceiling.

Treasury Secretary Jack Lew has said that come October 17 (or so), the nation will be unable to borrow money to pay the bills it continues to rack up.

The president’s trip to Bali for the Asia Pacific Economic Cooperation summit was canceled even though he isn’t currently engaged in negotiations with Republicans on how to solve the shutdown.

Instead of talking to each other, the two continue to trade barbs.

So the impasse continues.

The Federal work force — From furlough to paid vacation

As we start Week Two, things are looking up for federal workers.

A large portion of the approximately 400,000 civilian employees who had been furloughed by the Department of Defense may soon return to work.

Secretary of Defense Chuck Hagel has determined a special bill passed by Congress to fund the salaries of the active duty military also extends to those civilians.

Civilians in the rest of the government have reason to be happy too. The House of Representatives passed a special bill to ensure that furloughed government workers get paid once federal coffers are refilled. The Senate has yet to act, but Obama has said he will sign it.

So for them, a scary furlough is on course to turn into a paid vacation, although if it lasts too long, some workers might have real trouble paying mortgages and car loans and buying groceries while they wait for the shutdown to end.

Contractors and businesses feel effects

There is a lot less security for federal contractors — employees of private companies doing work for the government. But the reinstatement of Pentagon civilians led one contractor, Sikorsky Aircraft, to cancel furloughs for 2,000 workers at assembly plants in three states.

But the shutdown could soon start to affect sectors beyond defense as existing contracts run out of money. One industry group estimated that after another week of shutdown, up to 300,000 government contractors could be out of work.

Boeing is still making new planes, but because of furloughed Federal Aviation Administration inspectors, next week they can’t deliver any of them. And it’s working for imports too. A new Jetblue Airbus jet is stranded in Europe because it can’t be inspected.

The FAA announced on Monday it will recall more than 800 employees who work in aviation safety, some for the unit that inspects new planes and others assigned to airlines.

Furloughs for federal inspectors also kept the National Transportation Safety Board from dispatching a team to investigate a fatal explosion on a Washington Metro line over the weekend.

“Due to a lapse in funding, NTSB staff are furloughed. The agency can only engage in those activities necessary to address imminent threats to the safety of human life or for the protection of property,” according to a statement from the agency. “After careful consideration it was determined that this accident did not meet the criteria for exempting employees from furlough.”

Head Start — Expect more Closings

After reports during the first week of shutdown that some Head Start programs had been shuttered in Florida, Connecticut and a few other states, more programs will likely shut as local programs run out of money. Because these programs are administered with grants at the local level, they are difficult to keep track of. But more than 5,000 — of the millions that get it – have now lost their Head Start program. This means parents are scrambling to find care for their children.

Hurricane Prep/Dodging the storm

Tropical Storm Karen did not end up causing much damage, and the hurricane season so far has not proved severe in general.

But the threat from Karen was a reminder that the federal government usually plays a key role in preparation and cleanup.

FEMA has recalled some of the thousands of workers it furloughed, deeming them “essential.” If the storm had proved damaging, furloughed National Guardsmen would have been called up.

The longer the shutdown lasts, the more distinct its impact will be. By the end of the month, for instance, states will start to run out of funds for food assistance programs.

How is the shutdown affecting you? Tell CNN’s iReport.

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