The 2.1 million employees who keep the vast federal government afloat find themselves in a precarious limbo as talks between the White House and House Republicans to raise the country’s borrowing limit approach a June 1 deadline, when the Treasury Department warns that the government might no longer be able to pay its bills. Bipartisan negotiations were proceeding Friday, but the White House and House Republicans hadn’t yet reached a final agreement to avert the crisis.
If a default happens, the government could halt many day-to-day operations, from staffing national parks at the start of tourist season to research on the newest coronavirus vaccines at the National Institutes of Health. Millions of federal contractors could go unpaid. Benefit checks for veterans and other disabled Americans may not go out.
And unlike a shutdown — an unpleasant but predictable stoppage that federal employees have become accustomed to weathering — no one knows how a default in Washington would actually play out.
The personnel agency and the Office of Management and Budget, which also oversees the federal workforce, did not return requests for comment. The White House has consistently signaled its confidence that a compromise will be reached with Republicans.
“We are committed to not having missed payments and raising the debt ceiling so that’s not a situation we face,” Treasury Secretary Janet Yellen said this week at a Wall Street Journal CEO Council event. “We’re not involved in planning for what happens if there’s a default.”
Meanwhile, federal employees are bombarding their union headquarters with daily emails about whether they’ll be forced to work without pay and if the value of their government-managed stock portfolio will plummet.
“I’m one of those that doesn’t have a savings account to fall back on,” said Josephine Jones, who retired from the Environmental Protection Agency and now works there part time doing clerical work for $16.10 an hour.
“To be honest with you, I’ve tried not to listen to this subject on the news,” Jones said Thursday, taking a walk on her lunch break in the courtyard of the Ronald Reagan Federal Building and International Trade Center. She’s in her 80s and lives in the District. “I’d rather wait and just find out if I’m going to be furloughed. This is really going to affect me.”
Privately, federal managers say they are trying to game out how their agency would proceed in the face of a default — even without specific direction from the White House.
“It’s a voyage of exploration but not in a good way,” said one senior budget official, speaking on the condition of anonymity because he is not authorized to discuss planning for a default. “It’s sailing off the end of the world to see if [a default] is really there.”
The official said he has received “nothing” from the White House budget office on any of these topics. “I don’t know where to go with this.”
The government has never defaulted on its debt, despite coming within hours of catastrophe in 2011, the last standoff between the parties over raising the country’s borrowing limit. While a failure to resolve the current impasse draws comparisons to a government shutdown, the scenarios are very different.
During a shutdown, shorthand for a lapse in appropriations, it’s at least clear if any government functions will be funded since Congress has generally agreed on a budget for some agencies. A default next week, though, would leave Treasury to decide which bills it could pay, creating little certainly about, for example, whether the Smithsonian would stay open to visitors, the IRS would continue to process tax returns, or inspectors with the EPA would be able to monitor air pollution.
“Totally uncharted and troubling waters,” said Max Stier, president and chief executive of the nonpartisan Partnership for Public Service. “Unlike a shutdown, there is no certainty about what will be funded and what won’t and no track record.”
To buy time and…
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