Impacts	and	Costs	of	the	October	2013

Federal	Government	Shutdown	

NOVEMBER 2013
 
                                                            

Impacts and Costs of the October 2013 Federal Government Shutdown 

Executive Summary 

The October 2013 Federal government shutdown was the second longest since 1980 and 

the most significant on record, measured in terms of employee furlough days. Outside 

experts estimate that the shutdown will reduce fourth quarter Gross Domestic Product 

(GDP) growth by 0.2-0.6 percentage points. The Council of Economic Advisers estimates 

that the combination of the government shutdown and debt limit brinksmanship may have 

resulted in 120,000 fewer private-sector jobs created during the first two weeks of October.1 

This report examines the economic, budgetary, and programmatic costs of the government shutdown. These costs include economic disruption, Federal employee furloughs, 

programmatic impacts, other costs to the Federal budget, and impacts on the Federal 

workforce. 

Economic Disruption 

Independent forecasters estimate that the shutdown will lower fourth quarter real GDP 

growth by 0.2-0.6 percentage points, or $2-$6 billion in lost output. Most of these estimates of the shutdown’s economic costs are model-based projections, which incorporate 

only the shutdown’s effects on the flow of government spending. As a result, they may 

not fully account for the direct economic disruption that resulted from the shutdown of 

government services important to the functioning of the private economy. 

The Federal government shutdown: 

	 Halted permitting and environmental and other reviews, delaying jobcreating transportation and energy projects. For example, the Bureau of 

Land Management (BLM) was unable to process about 200 Applications for 

Permit to Drill, delaying energy development on Federal lands in North Dakota, Wyoming, Utah, and other states. 

	 Hindered trade by putting import and export licenses and applications on 

hold. For example, because the Treasury Department’s Alcohol and Tobacco 

Tax and Trade Bureau was unable to issue export certificates for beer, wine, 

and distilled spirits, more than two million liters of U.S. products were left sitting at ports unable to ship. 

1

 Council of Economic Advisers, “Economic Activity During the Government Shutdown and Debt Limit 

Brinksmanship,” October 2013, 

http://www.whitehouse.gov/sites/default/files/docs/weekly_indicators_report_final.pdf. 

2 
Impacts and Costs of the October 2013 Federal Government Shutdown 

 Disrupted private-sector lending to individuals and small businesses. During the shutdown, banks and other lenders could not access government income and Social Security Number verification services. Two weeks into the 

shutdown, the Internal Revenue Service (IRS) had an inventory of 1.2 million 

verification requests that could not be processed, potentially delaying approval of mortgages and other loans. 

 Halted Federal loans to small businesses, homeowners, and housing and 

healthcare facility developers. The Small Business Administration (SBA) was 

unable to process about 700 applications for $140 million in small business 

loans, and the Federal Housing Administration (FHA) was unable to process 

over 500 applications for loans to develop, rehabilitate, or refinance around 

80,000 multifamily rental units. 

 Delayed the Alaskan crab fishing season, costing fisherman thousands of 

dollars in lost revenue. Because the National Oceanic and Atmospheric Administration (NOAA) was unable to apportion harvest levels, the start of the 

season was delayed for three to four days. The fishing industry estimates these 

delays cost fisherman thousands of dollars of lost revenue per day, since days 

lost at the beginning of the season cannot be made up later. 

 Disrupted tourism and travel by closing national parks and the Smithsonian. The National Park Service (NPS) estimates that the shutdown led to over 

$500 million in lost visitor spending nationwide, a significant economic hit to 

communities surrounding national parks and monuments. 

 Significantly impacted small businesses that contract with the Federal 

government. Compared with the same period last year, small business contracts with the Department of Defense (DOD) dropped by almost one-third 

during the shutdown, and spending dropped 40 percent. 

 Delayed aircraft purchases and deliveries by closing the Federal Aviation 

Administration (FAA)’s Aircraft Registry. The General Aviation Manufacturers Association estimates that this delayed 156 aircraft deliveries valued at 

$1.9 billion. 

 Delayed Food and Drug Administration (FDA) approval of medical 

products, devices, and drugs. This delayed businesses in moving products to 

market. 

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Impacts and Costs of the October 2013 Federal Government Shutdown 

	 Deprived businesses of important information about the state of the economy. During the shutdown, Federal statistical agencies were unable to release 

data and reports ranging from the October jobs report and the Consumer Price 

Index to the Energy Information Administration’s reports on petroleum, diesel 

prices, heating oil, and natural gas storage. Businesses count on these data to 

make investment, pricing, and other decisions. 

Federal Employee Furloughs 

During the 16-day shutdown, Federal government employees were furloughed for a combined total of 6.6 million days, more than during any previous Federal government shutdown. Employees not on the job could not conduct food, product, and workplace safety 

inspections; prepare for flu season or monitor other public health issues; process tax refunds or respond to taxpayer questions; or provide numerous other services important to 

the general public and the economy. 

One way to quantify the cost of Federal employee furloughs is in terms of payroll costs 

for furloughed employee pay --- costs the Federal government incurred for services that 

could not be performed. We estimate that the total cost of pay for furloughed Federal 

employees during the period of the shutdown is roughly $2.0 billion.

2 Total compensation 

costs, including benefits, are about 30 percent larger, in the range of $2.5 billion. 

Impacts on Programs and Services 

An alternative way to quantify the cost of Federal employee furloughs is in terms of their 

impact on programs and services. Millions of Americans were impacted by the shutdown, 

due to furloughs of Federal employees, reduced services for the public, and delays in 

payments to Federal grantees, States, localities, contractors, and individuals. For example, the shutdown: 

	 Stalled weekly progress in reducing the backlog of veterans’ disability claims, 

which was previously being reduced at a rate of almost 20,000 claims per 

week. 

	 Delayed almost $4 billion in tax refunds and will delay the start of the 2014 

tax filing season by up to two weeks. 

	 Prevented hundreds of patients from enrolling in National Institutes of Health 

(NIH) clinical trials. 

2

 This estimate is based on average salary costs for furloughed employees by agency. It includes only costs 

for normal work days (excluding weekends and Columbus Day). 

4 
Impacts and Costs of the October 2013 Federal Government Shutdown 

 Forced Head Start grantees serving nearly 6,300 children to close their centers 

for up to nine days (before re-opening with the help of private philanthropists 

or their state). 

 Delayed home loan decisions for 8,000 rural families. 

 Led the FDA to delay nearly 500 food and feed domestic inspections and 

roughly 355 food safety inspections under State contracts. These routine inspections enable FDA to determine compliance with law and ensure that unsanitary conditions and practices that may result in foodborne illness are addressed. 

 Prevented the timely and complete investigation of 59 airplane accidents by 

the National Transportation Safety Board (NTSB). 

 Delayed workshops for 1,400 military service members to help them transition 

to civilian life and employment. 

 Forced cut-backs in Centers for Disease Control and Prevention (CDC) flu 

season surveillance and monitoring, leaving local public health authorities 

without access to complete national flu season data for two weeks. 

 Brought new Federal research activities to a standstill, with 98 percent of National Science Foundation (NSF), nearly three-quarters of NIH, and twothirds of CDC employees furloughed. 

 Required the National Institutes of Standards and Technology (NIST) and the 

National Aeronautics and Space Administration (NASA) to furlough four out 

of the five Nobel Prize-winning researchers currently employed by the Federal 

government. 

 Halted Environmental Protection Agency (EPA) inspections at about 1200 

sites, including hazardous waste facilities, chemical facilities, and drinking 

water systems. 

 Denied assistance to almost 500 small businesses seeking to keep their workplaces safe, because many States had to shut down the federally-funded Consultation Program. 

5 
Impacts and Costs of the October 2013 Federal Government Shutdown 

Other Costs to the Federal Budget 

On top of furloughs, the Federal government also incurred other direct budgetary costs as 

a result of the shutdown. For example: 

	 Fees went uncollected. For example, the National Park Service estimates that 

it lost about $7 million in revenue as a result of the shutdown, while the 

Smithsonian lost an additional $4 million in revenue. 

	 IRS enforcement and other program integrity measures were halted. The 

IRS was unable to conduct most enforcement activities during the shutdown, 

which normally collect about $1 billion per week. The Social Security Administration (SSA) was delayed in completing over 1,600 medical disability reviews and over 10,000 Supplemental Security Income (SSI) redeterminations 

each day. These reviews ensure that only eligible individuals receive Disability Insurance and SSI benefits. 

	 The Federal government will owe interest on late payments. Under the 

Prompt Payment Act and the Cash Management Improvement Act, the Federal government will be required to pay interest on billions of dollars of payments that could not be made on time during the shutdown, ranging from IRS 

refunds to payments to contractors. 

	 Agencies incurred personnel and other costs for shutdown implementation. Even when employees were able to work during the shutdown, thousands of employee hours – and other resources – were diverted to planning for 

and executing shutdown and startup activities. For example: 

o	 At the Department of Defense, civilian and military employees at hundreds of installations across the United States and around the world spent 

thousands of hours developing and implementing plans for managing a 

shutdown, implementing the Pay Our Military Act, and restarting full operations. 

o	 The National Nuclear Security Administration (NNSA) at the Department 

of Energy (DOE) devoted time and resources to placing nuclear weapons 

labs into safe standby condition, only to direct additional resources to restoring normal operations at these facilities days later. 

o	 The NSF and its contractors were forced to incur costs to begin placing assets that are part of the U.S. Antarctic Program into caretaker status, in order to safeguard them in the absence of funds to conduct planned research. 

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Impacts and Costs of the October 2013 Federal Government Shutdown 

o	 In a world of diminished program budgets, these shutdown and restart 

costs came at the expense of support for mission-related work. 

Impacts on the Federal Workforce 

The recent shutdown jeopardized both the income stability of hundreds of thousands of 

Federal employees and their ability to focus on important agency missions that citizens 

rely upon each day. 

During the shutdown, hundreds of thousands of Federal employees did not receive their 

full paychecks, including many employees that were legally required to work during the 

lapse. While all Federal employees ultimately have been compensated for the period of 

the shutdown, the burden of delayed paychecks on Federal workers and their families was 

significant and harmful. 

Furloughs during the shutdown also followed an unprecedented three-year pay freeze for 

Federal employees, and, for hundreds of thousands of workers, administrative furloughs 

earlier this year caused by sequestration. The shutdown disrupted agency operations in 

many ways and has been challenging to recover from. 

7 
 

                                                            

 

Impacts and Costs of the October 2013 Federal Government Shutdown 

Economic Cost of the Federal 

Government Shutdown 

Leading independent forecasters estimate that the shutdown will lower fourth quarter real 

GDP growth by 0.2-0.6 percentage points or more, or $2-$6 billion in lost output.3 

	 Standard and Poor’s: “We believe that, to date, the shutdown has shaved at 

least 0.6% off of annualized fourth-quarter 2013 GDP growth...”4 

	 Macroeconomic Advisers: “Calibrating [the 1995-1996 shutdowns] to today’s 

economy, we estimate that a two-week shutdown would directly trim about 0.3 

percentage point from fourth quarter growth, mainly by interrupting the flow of 

services produced by federal employees.”5 

	 Goldman Sachs projected that the shutdown would reduce GDP growth by 

0.14 percentage points per week, even after most furloughed Department of Defense employees returned to work.6 

	 Mark Zandi, Moody’s: “The 16-day Federal shutdown and political brinksmanship around the Treasury debt ceiling hurt the economy. The hit to fourth 

quarter real GDP is estimated at... half a percentage point of growth.”7 

However, most of these estimates of the shutdown’s economic costs are model-based 

projections that only take into account how the shutdown affected the direct flow of 

spending into the economy. There are other factors that should be considered as well, for 

example: 

1. The estimates do not capture any additional costs imposed through the impact of the 

shutdown on consumer and business confidence. 

3

 Some have reported this output loss on an annualized basis, in which case it amounts to up to $24 billion. 

4 Standard and Poor’s, October 16, 2013. 

5

 Macroeconomic Advisers, on behalf of the Peterson Foundation, “The Costs of Crisis-Driven Fiscal Policy,” October 2013. 

6

 Goldman Sachs Global Economics, “Shutdown Continues But Recent Actions Are Likely to Reduce Economic Effects,” October 6, 2013. 

7

 Mark Zandi, “A Budget Battle Postmortem,” Moody’s Analytics, October 2013. 

8 
                                                            

 

Impacts and Costs of the October 2013 Federal Government Shutdown 

	 During the shutdown, the Gallup Daily Economic Confidence Index fell to its 

lowest level since December 2011, likely reflecting the combined impact of the 

shutdown and debt limit brinksmanship. 

	 The October Reuters/Michigan Index of Consumer was at its lowest level since 

December 2012. 

	 The Index of Consumer Expectations fell to its lowest level since November 

2011. 

	 A survey commissioned by Goldman Sachs found that two out of five Americans 

said they would reduce their spending due to the government shutdown.8 

Using actual high-frequency economic data from the period of the shutdown, the Council 

of Economic Advisers has estimated that the combination of the Federal government 

shutdown and debt limit brinksmanship may have reduced fourth-quarter GDP growth by 

0.25 percentage points and resulted in 120,000 fewer private sector jobs created between 

October 1 and October 12.9

 The shutdown lasted until October 16, meaning that the total 

impact may have been even greater. 

2. The projections do not fully capture the direct economic disruption caused by the shutdown of government activities the private sector relies on. For example, the Federal government shutdown: 

	 Halted permitting and environmental and other reviews, delaying jobcreating transportation and energy projects in North Dakota, Wyoming, 

Utah and other states. The Federal government was unable to issue permits 

to conduct drilling operations on Federal lands, and it stopped or delayed environmental reviews of planned transportation and energy projects, which 

prevented companies from moving forward on these projects. In particular, 

BLM was unable to process about 200 Applications for Permit to Drill 

(APDs). This delayed energy development on Federal lands in North Dakota, 

Wyoming, Utah and other states. Oil and gas lease sales were also postponed. 

	 Hindered trade by putting import and export licenses and applications on 

hold and halting export promotion activities. 

8

 Minsi Chung, “Two Out of Five Americans Cut Spending Amid Government Shutdown,” Bloomberg, 

October 15, 2013. 

9

 Council of Economic Advisers, “Economic Activity During the Government Shutdown and Debt Limit 

Brinksmanship,” October 2013, 

http://www.whitehouse.gov/sites/default/files/docs/weekly_indicators_report_final.pdf. 

9 
Impacts and Costs of the October 2013 Federal Government Shutdown 

o	 The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau was unable to issue export certifications for beer, wine, and distilled spirits in response to 100 requests from approximately 65 businesses. As a result, more than two million liters of U.S. products were 

left sitting at ports, unable to ship. 

o	 The Department of Commerce’s Bureau of Industry and Security 

could not accept new export license applications and pending requests 

were put on hold, preventing some sellers of high-tech goods from exporting their products. 

o	 The Export-Import Bank (Ex-Im) suspended approvals of new applications for loans, guarantees, and insurance. In a typical month, Ex-Im 

approves nearly $3 billion in authorizations with export value close to 

$4.2 billion. 

	 Disrupted private-sector lending to individuals and small businesses. Financial institutions depend on IRS income verification (with taxpayer permission) to determine eligibility for loans such as mortgages. The IRS usually receives close to 400,000 requests per week; two weeks into the shutdown, IRS 

had an inventory of 1.2 million requests that could not be processed. Meanwhile, SSA suspended its consent-based Social Security Number verification 

system, a system that many financial institutions use to verify Social Security 

numbers prior to granting credit. This led a number of financial institutions to 

suspend mortgage processing due to the inability to verify Social Security 

numbers, according to the Mortgage Bankers Association. 

	 Halted Federal loans to small businesses, homeowners, and housing and 

healthcare facility developers. 

o	 Roughly 700 small businesses applied for roughly $140 million in 

loans during the shutdown; none of these loans could be approved until the shutdown ended. 

o	 FHA delayed processing over 500 applications for loans to develop, 

rehabilitate, or refinance around 80,000 units of multifamily rental 

housing. 

o	 FHA also suspended the Home Equity Conversion Mortgage (HECM) 

program, a program that serves seniors who need to draw on their 

10 
Impacts and Costs of the October 2013 Federal Government Shutdown 

home equity to cover living expenses and medical costs. During a typical two-week period, FHA insures over 2,300 HECM loans. 

	 Delayed the Alaskan crab fishing season by three to four days, costing 

fisherman thousands of dollars in lost revenue. To prevent unsustainable 

overfishing, NOAA Fisheries allocate harvest levels and issue permits to fishermen before they can fish. Because the NOAA Fisheries staff were furloughed, fishermen were not able to fish until the government was reopened 

and these permits were processed, which was 3-4 days after the regularly 

scheduled start of the season. Industry estimates that each lost day led to thousands of dollars of lost revenue for both the fishing industry and coastal communities, revenue needed to recoup the millions of dollars invested to prepare 

for the season. 

	 Disrupted tourism and travel by closing national parks and the Smithsonian Normally, National Parks welcome an average of 715,000 visitors a day 

during October, and these visitors spend an average of $33 million a day, benefiting local communities surrounding the parks. NPS estimates that the shutdown led to over $500 million in lost visitor spending nationwide, even after 

taking into account the 13 parks that were re-opened using state funds after 

more than a week of being shut down. The park closures also impacted the 

broader travel industry and local businesses, as families across the country 

cancelled their travel plans. The travel industry and tourism were also impacted by the Smithsonian closures. For example, the National Gallery of Art receives approximately 12,000 visitors a day on average in the fall, suggesting 

that some 200,000 people missed visiting the Gallery during the shutdown. 

	 Significantly impacted small businesses that contract with the Federal 

government. Over the first two weeks of the shutdown, small businesses contracts with DOD were cut by almost one-third and spending was down 40 

percent, compared to the same period in the previous year. Payment delays 

during the shutdown forced contractors to temporarily lay off employees and 

imposed particular financial hardship on small businesses with less ability to 

absorb losses and put off payments of their own. 

	 Delayed aircraft purchases and deliveries by closing the FAA’s Aircraft 

Registry. During the shutdown, aircraft registrations were put on hold due to 

furloughs of employees at the Office of Aircraft Registry. The General Aviation Manufacturers Association reports that the shutdown delayed delivery of 

156 aircraft deliveries valued at $1.9 billion. The FAA is currently working to 

clear the backlog of delayed registrations. 

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Impacts and Costs of the October 2013 Federal Government Shutdown 

	 Delayed efforts to combat invasive species that are endangering Great 

Lakes fisheries. U.S. Geological Survey (USGS) scientists were unable complete field-testing of a technology to prevent the spread of Asian carp into the 

Great Lakes. The window of opportunity to field test this technology was 

missed, due to cooling water temperatures, and testing will now be delayed for 

six months. Work was also delayed on other invasive species projects, including research on the spread of dangerous Africanized honeybees in the Southwest, invasive grass species involved in intensifying wildfires, and white-nose 

bat syndrome impacting bats in national parks. 

	 Delayed FDA approval of medical products, devices, and drugs. In general, no new Fiscal Year (FY) 2014 drug applications, biologics applications, 

generic drug applications, animal drug applications, or medical device applications sent to the FDA during the shutdown could be accepted, processed, or 

reviewed. This delayed businesses in moving these products to market. 

	 Deprived businesses of important information about the state of the economy. During the shutdown, Federal statistical agencies were unable to release 

most economic data and reports. For example: 

o	 The Bureau of Labor Statistics did not release monthly reports on the 

Employment Situation, the Producer Price Index, the Consumer Price 

Index, Real Earnings, or the U.S. Import and Export Price Indexes; 

o	 The Department of Commerce’s Census Bureau and Bureau of Economic Analysis did not release key monthly reports on International 

Trade, Retail Sales, or Construction; 

o	 The Energy Information Administration delayed reports including the 

Principal Economic Indicator for natural gas storage, a report that sets 

diesel compensation rates for many commercial truckers, a report of 

heating oil and propane prices faced by many households, and a report 

assessing petroleum inventories; 

o	 The National Agricultural Statistics Service postponed, cancelled, or 

reduced in scope 21 commodity, service, and farm wage reports and 

data releases; and 

o	 The release of Census of Agriculture statistical products was postponed. 

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Impacts and Costs of the October 2013 Federal Government Shutdown 

Federal Employee Furloughs
 

The largest direct cost of the Federal government shutdown – both to the Federal budget 

and to the economy – was work not performed by Federal employees during the 16-day 

period. Federal employees were furloughed for a combined total of 6.6 million work days, 

with furloughs affecting workers at the vast majority of agencies. Although the October 

2013 shutdown was shorter than the 21-day shutdown that took place in December 1995 

– January 1996, the total number of employee furlough days was larger, even if one adjusts for growth in the size of the Federal workforce. This is largely because seven appropriations bills were enacted before the start of the December 1995 – January 1996 shutdown, so several major agencies were able to operate normally during that period of time. 

By contrast, as of October 1, 2013, no agencies had received full Fiscal Year 2014 annual 

appropriations. 

One way to quantify the cost of furloughs is in terms of the amount the Federal government had to pay for work not performed. We estimate that the total cost of pay due to 

federal employees furloughed during the shutdown is roughly $2.0 billion; total compensation costs are about 30 percent larger (about $2.5 billion). This exceeds the comparable payroll costs of $430 million (about $650 million in todays’ dollars) for the November 1995 shutdown and $630 million (about $1 billion in today’s dollars) for the December 1995 – January 1996 shutdown.10 

Appendix Table 1 shows the breakdown of furlough days by agency. Overall, Federal 

agencies furloughed roughly 850,000 employees per day in the immediate aftermath of 

the lapse in appropriations, or roughly 40 percent of the entire civilian Federal workforce. Those employees that were not furloughed were retained either because they were 

performing activities that are “excepted” under the applicable legal requirements (such as 

activities necessary to maintain the safety of life or the protection of property), or because 

funding remained available to pay their salaries and expenses during the lapse from 

sources other than annual appropriations. 

Because circumstances evolved over the course of the shutdown, there were instances in 

which agencies modified the number of employees on furlough, both recalling employees 

and furloughing additional employees. Most notably, after Congress passed and the President signed the Pay Our Military Act, the Department of Defense recalled the majority 

of the roughly 400,000 civilian employees that were furloughed for the first week of the 

lapse. (The Pay Our Military Act provided appropriations for the pay and allowances of 

10 Following the two shutdowns in Fiscal Year 1996, OMB calculated a combined cost to the Federal government of $1.4 billion ($430 million in payroll costs from the November shutdown, $630 million in payroll costs from the December-January shutdown, and $300 million in other Federal costs.) 

13 
Impacts and Costs of the October 2013 Federal Government Shutdown 

those civilian personnel that that the Secretary of Defense determined provide support to 

members of the Armed Forces.) 

Changes at other agencies over the course of the shutdown were smaller in magnitude 

and went in both directions. For example, during the second week of the shutdown, the 

Social Security Administration recalled over 8,000 workers to process claims appeals and 

conduct other critical work necessary to ensure the timely payment of benefits. In addition, some employees who were initially working were subsequently furloughed. For instance, over 7,800 employees at the Veterans’ Benefits Administration that were working 

for the first week of the shutdown were furloughed following the exhaustion of remaining 

carryover balances from the previous fiscal year. The Federal Emergency Management 

Agency (FEMA) recalled a select number of employees to prepare for Tropical Storm 

Karen, but the agency subsequently placed these employees back on furlough after the 

storm dissipated. These changes to the number of furloughed employees reflect the dynamic nature of the shutdown, as agencies responded to changing circumstances over the 

two and a half weeks. 

14 
 

Impacts and Costs of the October 2013 Federal Government Shutdown 

Impacts on Programs and Services
 Another way to quantify the costs of Federal employee furloughs is by examining the 

shutdown’s impact on programs and services. The shutdown impacted millions of Americans, due to furloughs of Federal employees, reduced services for the public, and delays 

in payments to Federal grantees, States, localities, contractors, and individuals. Employees not on the job could not conduct many food, product, and workplace safety inspections, prepare for flu season or monitor other public health issues, or provide numerous 

other services important to the general public and the economy. Meanwhile, many grantees and contractors not receiving Federal payments during the shutdown furloughed their 

own employees and delayed or terminated services. The shutdown also affected direct 

services for veterans, seniors, and other vulnerable groups; public health and basic research; product safety and environmental protection; worker rights and safety; international trade and relations; and other basic government services. 

Direct Services for Veterans, Seniors, and Other Vulnerable 

Groups 

	 Stalled weekly progress in reducing the veterans’ disability claims backlog, 

which had previously been progressing at a rate of almost 20,000 claims per 

week. In the six months before the shutdown, the Department of Veterans Affairs 

(VA) reduced the disability claims backlog by about 30 percent, and, in the week 

before the shutdown, VA processed enough applications to reduce the backlog by 

about 18,000 claims. In contrast, during the two- and a half weeks of the shutdown, the backlog remained roughly flat (at about 418,000 claims). 

	 Halted or curtailed important veterans’ services. Services that help veterans 

understand their benefits – including the education call center, hotlines, and all 

regional offices outreach activities – were closed to the public during the shutdown, and many veterans lost access to vocational rehabilitation and education 

counseling services. 

	 Delayed access for 1,400 military service members to workshops designed to 

help them transition to civilian life and employment. The shutdown forced the 

postponement of some Transition Assistance Program (TAP) workshops, which 

help transitioning military service members find civilian jobs and access benefits. 

40 TAP employment workshops were cancelled and had to be rescheduled, which 

delayed transition support to 1,400 service members. 

 Temporarily closed six Head Start grantees, serving nearly 6,300 children. 

Head start grantees operating in Alabama, Connecticut, Florida, Georgia, Mis15 
Impacts and Costs of the October 2013 Federal Government Shutdown 

sissippi, and South Carolina closed for up to nine days before reopening with 

funds provided by philanthropists through the National Head Start Association or 

their state. 

	 Delayed home loan decisions for 8,000 low-income working families in rural 

communities. The Department of Agriculture’s single-family loan guarantee program was unable to process loan applications during the shutdown, preventing eligible families from receiving loans. 

	 Kept home more than 600 young people who had committed a year of their 

lives to serve local communities through AmeriCorps. AmeriCorps National 

Civilian Community Corps is a residential program that engages 18- to 24-yearolds in national service, including responding to natural and other disasters such 

as floods, fires, and tornadoes. More than 600 Corps members who were prepared 

to begin their service the week of October 6 were told to stay home. 

Public Health and Research 

	 Cut back flu season surveillance and monitoring, as well as other public 

health monitoring. CDC cut back its annual flu vaccination campaign for a period of time and suspended its weekly “Flu View” report, leaving local public 

health authorities without access to complete national flu season data for two 

weeks. CDC staff also discontinued analysis of surveillance and molecular epidemiologic data to identify clusters of linked Hepatitis and Tuberculosis cases 

that cross State or local jurisdictional boundaries. 

	 Put on hold most Federal government support for new basic research, due to 

furloughs of 98 percent of NSF employees, nearly three quarters of the NIH, 

and two thirds of the CDC. For example, no new NSF grants or grant continuations were issued during the shutdown; on average, NSF issues about 765 grants 

and continuations in a two-week period. 

	 Furloughed four out of five Nobel Prize-winning researchers currently employed by the Federal government. Three of the Laureates who were furloughed 

work at NIST, performing cutting edge research in physics that could have broad 

commercial applicability in areas such as advanced communications, cyber security, and computing. The fourth furloughed Laureate works at NASA on the new, 

much more capable, successor to the Hubble Space Telescope. Across agencies, 

many of the Federal researchers who may contribute to the next Nobel Prizewinning discovery in science or medicine were furloughed, with their work delayed or disrupted. 

16 
Impacts and Costs of the October 2013 Federal Government Shutdown 

	 Prevented the enrollment of patients in NIH Clinical Center studies. Although the hospital remained open for patients already enrolled in studies, NIH 

could not enroll new patients into current studies or start new studies during the 

shutdown, except for patients with life-threatening or urgent medical problems. 

During the shutdown, NIH admitted 25 patients, who had a life threatening or urgent medical problem, but seven clinical protocols that were scheduled to begin 

during the period of the shutdown were delayed. 

	 Forced the transition of the NSF’s U.S. Antarctic Program (USAP) into caretaker status, resulting in the cancellation of some research activities for the 

entire 2013-2014 season. The NSF is responsible for maintaining the United 

States’ presence in the Antarctic, including an active research program and logistical support for that research. With available funds exhausted after two weeks of 

the shutdown, NSF began placing USAP research stations, ships and other assets 

into caretaker status, including redeploying scientific and contracted operations 

personnel. Caretaker status for the research stations entails minimum human occupancy to ensure protection of government property and safeguarding of human 

lives. The stations could not be completely shut down because extreme environmental conditions would quickly destroy them. When the government reopened, 

NSF worked to restore normal operations, but some research and operational activities will have to be cancelled altogether this year. For example, NASA and 

NSF had to cancel their Antarctic-launched long-duration space science research 

missions for the year because NSF cannot reopen facilities in time to get research 

balloons off on schedule. The balloons are used as a platform for space science 

research into phenomenon such as cosmic rays and the Big Bang. 

	 Prevented access to state of the art instruments at NIST that researchers 

from the private sector and academia rely on. For example, access was denied 

to the NIST Center for Neutron Research (NCNR), impacting researchers from 

academia and industry who had scheduled experiments months in advance. Approximately 70 experiments scheduled at the NCNR months in advance could not 

be performed. The financial loss due to lost beamtime was approximately $2 million. 

	 Stopped the National Radio Astronomy Observatory’s operations at its facilities in Charlottesville, VA, Greenbank, WV, and Socorro, New Mexico, as 

well as 10 Very Long Baseline Array sites across the United States. During 

the shutdown, no new observations were made at these facilities, jeopardizing ongoing projects, especially research requiring continuous data. Approximately 500 

hours of observing time was lost at Green Bank Observatory; almost half of 

17 
Impacts and Costs of the October 2013 Federal Government Shutdown 

which was high frequency observing time that is seasonal and cannot be rescheduled. Over 600 hours of observing time were lost at the Very Large Array and 

Very Long Baseline Array. In addition, observatories ceased support for approximately 2,700 users who were processing existing data or planning new observations. This affected a range of projects that detect radio waves emitted by astronomical objects and also advance state-of-the-art signal processing. The loss of 

time and user support will affect not only researchers, but also undergraduate projects, graduate students seeking data for their thesis projects, and public and 

school groups whose visits were cancelled. 

Product Safety and Environmental Protection 

	 Sharply curtailed routine FDA inspections of domestic and international 

food facilities, delaying nearly 500 food and feed domestic inspections and 

roughly 355 food safety inspections performed by States under contract. 

While the agency continued to conduct “for cause” inspections where there was 

an imminent threat to health or life, nearly 500 food and feed domestic inspections 

and roughly 355 state inspections that are normally performed during this period 

each year did not occur during the shutdown. These routine inspections enable 

FDA to determine compliance with the law and ensure that unsanitary conditions 

and practices which may result in foodborne illness are addressed. The FDA also 

cut back on examination, sampling, and laboratory analysis of imported products 

during the shutdown. 

	 Discontinued FDA oversight of certain non-food products and left consumer 

questions unanswered. During the shutdown, the FDA discontinued almost all 

activities related to the regulation of cosmetics, review of information from manufacturers of medical products (including allergenic extracts, whole blood, and 

blood components for transfusion), and many user-fee supported human and animal drug, device, or biological product applications. The FDA was also unable to 

answer routine consumer questions regarding food safety, medical devices, blood 

products and vaccines, and veterinary products. 

	 Prevented the timely and full investigation of 59 airplane accidents by the 

NTSB. With the large majority of its workforce furloughed, the NTSB was only 

able to launch investigations into two aviation accidents during the shutdown, putting it behind schedule for these and other ongoing investigations. The NTSB was 

also forced to reschedule two important public investigative hearings. 

18 
Impacts and Costs of the October 2013 Federal Government Shutdown 

	 Halted the EPA’s non-emergency inspections at about 1200 hazardous waste 

facilities, chemical facilities, and drinking water systems; discontinued evaluations of potential health impacts of new industrial chemicals; and stopped 

reviews of pesticides for adverse impacts to health and the environment. 

While the majority of these inspections will be rescheduled, they are unlikely to 

fully be made up during this fiscal year. 

	 Stopped Consumer Product Safety Commission (CPSC) work related to recalls of products that could cause injuries. CPSC was only able to continue 

work related to products that present an imminent threat to consumer safety, and 

therefore normal work related to recalls was halted. CPSC’s port inspectors were 

furloughed, preventing the agency from screening thousands of products, including children's merchandise that could contain excessive lead and sleepwear that 

may violate flammability standards. 

	 Prevented the USGS from gathering and processing data on natural disasters. The USGS lost an opportunity to gather information on damage caused by 

the Colorado floods, including landslides, debris flows, and other activities. The 

loss of these data significantly reduces the ability of scientists and disaster response professionals to learn from these extreme events. The shutdown also impacted the capacity of the USGS to deliver information to states on potential pollution caused by record flooding in the South Platte River Basin. 

Worker Rights and Safety 

	 Suspended almost 1,400 Federal inspections to prevent workplace fatalities 

and injuries, which will not be fully made up. The Occupational Safety and 

Health Administration (OSHA) protects the safety and health of the nation’s 

workers, in part by conducting workplace inspections in high-hazard industries. 

During the lapse in appropriations, OSHA could only respond to workplace fatalities, catastrophes and imminent danger situations when there was a high risk of 

death or serious physical harm. OSHA opened only 283 total inspections during 

the shutdown – just 16 percent of the number it opened during same time period 

last year – and put approximately 1,370 inspections on hold. 

	 Denied assistance to almost 500 small businesses across the country seeking 

to keep their workplaces safe. The government shutdown impacted OSHA’s 

Consultation Program, through which States provide free on-site safety and health 

assistance to small businesses. One-third of Consultation Programs stopped doing 

employer visits during the shutdown, impacting almost 500 small businesses. 

19 
Impacts and Costs of the October 2013 Federal Government Shutdown 

	 Stopped nearly all investigations to enforce minimum wage, overtime, child 

labor bans, and other workplace protections. The Wage and Hour Division 

(WHD) at the Department of Labor is responsible for enforcing a variety of laws 

that establish minimum standards for wages and working conditions. In a typical 

week, WHD concludes more than 600 investigations and compliance actions. 

However, during the shutdown, WHD was only able to respond to incidents involving imminent serious injury or death of a child or farmworker; as a result, it 

opened only one new investigation during the two and a half week shutdown and 

put more than 6,000 ongoing investigations on hold. Over the course of the shutdown, because Wage and Hour investigators were unable to perform their jobs, 

back wage payments of approximately $8.8 million for an estimated 12,100 

workers went uncollected. 

	 Delayed ongoing investigation activities surrounding recent workplace safety 

or casualty events. Chemical Safety Board investigators were furloughed, halting 

their analysis of the West, Texas fertilizer plant explosion from April during the 

shutdown period. 

	 Denied a venue for legal relief to thousands of workers experiencing discrimination. The Equal Employment Opportunity Commission (EEOC) is the primary 

agency charged with the enforcement of Federal employment discrimination laws. 

Americans who believe they have experienced discrimination in the workplace 

must first file charges with the EEOC and await a response before they can file 

suit in Federal court, and so timely disposition of these charges is critical to 

EEOC’s mission. During the shutdown, EEOC received nearly 3,150 charges of 

employment discrimination that it was unable to investigate, creating a backlog 

that it will take about one month to work through. 

International Trade and Relations 

	 Furloughed nearly all of the Treasury Department’s Office of Foreign Asset 

Control (OFAC), which implements the U.S. government’s financial sanctions against countries such as Iran and Syria. With only a very small share of 

employees excepted, the office was unable to fully sustain many of its core functions of: (1) issuing new sanctions designations against those enabling the governments of Iran and Syria as well as terrorist organizations, Weapons of Mass 

Destruction proliferators, narcotics cartels, and transnational organized crime 

groups; (2) investigating and penalizing sanctions violations; (3) issuing licenses 

to authorize humanitarian and other important activities that might otherwise be 

barred by sanctions; and (4) issuing new sanctions prohibitions and guidance. The 

majority of staff at Treasury Department’s Office of Terrorist Financing and Fi20 
Impacts and Costs of the October 2013 Federal Government Shutdown 

nancial Crimes, Office of Intelligence and Analysis, and Financial Crimes Enforcement Network were also furloughed. 

	 Cancelled travel by the President and other Administration officials that 

would have advanced U.S. trade goals and promoted job creation. The President was forced to cancel a trip to the Asia-Pacific Economic Cooperation 

(APEC), a trip that could have been a key step in negotiating the Trans-Pacific 

Partnership regional trade agreement that will link the United States to economies 

throughout the Asia-Pacific region. U.S. Trade Representative Michael Froman 

had to postpone a round of negotiations in Brussels on the Transatlantic Trade and 

Investment Partnership, a trade and investment agreement being negotiated between the European Union and the United States. These trade agreements are critical to opening up markets for U.S. businesses to export goods and services 

abroad and create jobs at home. 

Other Basic Government Services 

 Delayed tax filing assistance and almost $4 billion in refunds to taxpayers. 

While continuing to file returns and making estimated payments during the shutdown, taxpayers could not receive assistance from IRS walk-in sites or telephone 

services, and taxpayer correspondence went unaddressed. Meanwhile, roughly 

$3.7 billion in refunds (including $2.2 billion in refunds to individuals and $1.5 

billion in refunds to businesses) were delayed. 

	 Delayed the start of the 2014 tax filing season up to two weeks. With most IRS 

operations halted during the shutdown, the IRS could not engage in normal computer programming and testing in preparation for the 2014 tax filing season. As a 

result, some taxpayers who file early and are entitled to refunds may have their refunds delayed for up to two weeks due to the delay of the start of the originally 

planned 2014 tax filing season. 

	 Suspended the issuance of Social Security cards and closed down the EVerify system for employers to check worker eligibility. On a typical day, approximately 60,000 Americans apply for Social Security cards, which they may 

need to be able to start a job, take out a loan, open a bank account, or conduct 

other financial transactions. During the shutdown, SSA could not issue new Social Security cards. Employers were also unable to access the E-Verify system to 

check prospective employees’ immigration status. 

21 
Impacts and Costs of the October 2013 Federal Government Shutdown 

Other Direct Budgetary Costs 

On top of furloughs, shutdown implementation costs, and reductions to key programs and 

services, the Federal government also incurred other direct budgetary costs as a result of 

the shutdown. These included: 

	 Uncollected fees. The National Park Service estimates that it was unable to collect about $450,000 per day in revenue from entrance fees, campgrounds, tours, 

and special uses, for a total cost of roughly $7 million in lost revenue. In addition, 

the closure of the Smithsonian resulted in an additional $4 million in lost revenue. 

This is from lost museum-based revenue from stores and theaters, lost revenue 

from the National Zoo shops/concessions, and lost special events revenue. 

	 Program Integrity Activities. Program integrity activities generally had to be 

suspended during the shutdown, despite the fact that these measures save money 

over the long run. The shutdown halted most IRS enforcement activities, which 

collect $1 billion per week on average. In addition, SSA was delayed in completing over 1,600 medical disability reviews and over 10,000 Supplemental Security 

Income (SSI) redeterminations each day. Medical disability reviews assess 

whether individuals are still medically eligible for disability benefits, while SSI 

redeterminations review whether beneficiaries meet SSI’s non-medical eligibility 

factors, such as income and asset limits, and ensure that beneficiaries are paid the 

correct amounts. 

	 Interest due on late payments. Under the Prompt Payment Act and the Cash 

Management Improvement Act, the federal government is required to pay interest 

on payments due to third parties when it fails to pay these bills on time. The government will owe interest on billions of dollars of payments not made on time 

during the shutdown, ranging from IRS refunds to contractor payments. 

	 Contract Workforce. The shutdown resulted in over 10,000 stop work orders for 

contracts and numerous temporary layoffs among the federal contractor community. Federal acquisition regulations allow contractors to request equitable adjustments for certain cost impacts associated with having to put operations on 

hold (e.g., costs of maintaining idle facilities, unabsorbed overhead). There could 

be thousands of requests from contractors seeking to be reimbursed for costs incurred as a result of these suspensions. 

In addition, simply implementing the government shutdown and re-start activities imposed significant costs, diverting employee hours and agency resources from mission22 
Impacts and Costs of the October 2013 Federal Government Shutdown 

critical functions. While a comprehensive estimate of these costs is not available, examples include: 

	 At the Department of Defense, civilian and military employees at hundreds of installations across the United States and around the world spent thousands of hours 

developing and implementing plans for managing a lapse in appropriations, implementing the Pay Our Military Act, and restarting full operations. 

	 The Department of Energy and its contractors devoted significant resources to 

placing labs and project sites into safe standby condition and then returning them 

to operational status. For example: 

o	 Restoring normal operations at the National Nuclear Security Administration can take more than a week and labs and plants are likely to 

have lost at least three weeks of mission work, or about 6 percent of the 

year’s productivity, due to the shutdown. 

o	 Similarly, disruptions at nuclear cleanup sites associated with the shutdown will cost two to three weeks of productivity, and may cause the 

Department of Energy to miss cleanup milestones agreed to with the 

states where cleanup is under way. 

	 The NSF and its contractors incurred significant costs to begin placing assets that 

are part of the U.S. Antarctic Program and other major research facilities into 

caretaker status, to safeguard them in the absence of funds to conduct planned research. NSF is now incurring additional costs to reopen these facilities and restart 

research to the extent possible. 

	 The Department of Transportation (DOT) has estimated that it will incur additional costs of around $325,000 associated with closing and reopening the US 

Merchant Marine Academy. Because of the shutdown, the US Merchant Marine 

Academy had to shut down classes for nearly three weeks. This will have a ripple 

effect throughout the school year, as midshipmen make up lost sea and class time. 

DOT will incur costs for staff overtime and to transport Midshipmen back to 

campus. 

23 
 

                                                            

Impacts and Costs of the October 2013 Federal Government Shutdown 

Impacts on the Federal Workforce 

The shutdown jeopardized both the income stability of Federal employees and their ability to focus on important agency missions that citizens rely upon each day. 

During the shutdown, hundreds of thousands of Federal employees did not receive their 

full paychecks, including many who were legally required to work during the lapse. Also, 

due to expiration of a statutory provision that was in effect during the shutdown in 1995-

1996, excepted employees (who were legally required to work during the lapse) were not 

eligible to apply for unemployment benefits to help meet any immediate cash flow needs. 

While all Federal employees have now been compensated for the period of the shutdown, 

the burden this placed on families was significant and avoidable. 

It is also important to note that the shutdown came on top of an unprecedented three-year 

pay freeze for Federal employees as well as furloughs and other reductions that resulted 

from sequestration earlier this year. 

The shutdown and sequestration-related furloughs risk undermining the competitive advantage government agencies have traditionally used in recruiting and retaining a talented 

workforce – income stability provided by civil service jobs, and a calling to the important work of public service. Notably, surveys have shown that compensation and the 

nature of the work are the top two considerations of students as they weigh job options.11 

This allows the government to be competitive for many high skill jobs where the private 

sector enjoys other advantages. 

Reports from news outlets highlighted the challenges shutdown presents for both retaining current employees and the recruiting top talent for the future. For example, as one 

EPA employee told the Washington Post “We love public service. We’re very committed 

to our jobs and the mission of our agency. But it’s just too unstable.”12 Federal contractors are also worried about hiring in an environment of heightened uncertainty. Gregory 

Bloom, the president of a small business that works on design and engineering for 

NASA, told the Washington Post, “Trying to get the best and the brightest to come join a 

company that specializes in national defense or NASA-supported activities and not being 

able to tell them that they’re going to have a job in six months is a real tricky challenge 

11 National Association of Colleges and Employers’ 2012 Student Survey Report, accessed October 18, 

2013 at 

12 Hendrix, Steve. Halved Paychecks Force the Furloughed to Slash Expenses and Take Loans, Second 

Jobs; The Washington Post. October 10, 2013. Accessed on October 18, 2013 at 

http://articles.washingtonpost.com/2013-10-10/local/42902098_1_second-jobs-retirementsavings-paychecks 

24 
                                                            

 

Impacts and Costs of the October 2013 Federal Government Shutdown 

for us. What keeps coming back to us is ‘why go work in national defense or aerospace 

when we can go to Google and know that we’re going to have a job?’” 13 

Studies have shown that – above all else – employees of all stripes value an ability to 

make progress each day in their job. The Federal government is fortunate to have such a 

high percent of its employees willing to put in extra effort to get a job done (96 percent in 

the latest survey). However, at the end of the day, the government shutdown risks seriously damaging the ability to attract and retain the kind of driven, patriotic Americans to 

public service that our citizens deserve and that our system of self-government demands. 

13 Yeager, Holly. Federal Shutdown Starts Affecting America Beyond Government Workers; The Standard 

Examiner. October 11, 2013. Accessed on October 18, 2013 at 

http://www.standard.net/stories/2013/10/11/federal-shutdown-starts-affecting-america-beyondgovernment-workers 

25 
Impacts and Costs of the October 2013 Federal Government Shutdown 

Appendix Table 1: Estimated Employee Furlough Days by Agency 

Major Agencies Total Employee Furlough Days 

(Thousands) 

Department of Defense 1,600 

Department of the Treasury 985 

Department of Agriculture 737 

Department of the Interior 646 

Department of Health and Human Services 449 

Department of Commerce 312 

Department of Homeland Security 303 

Department of Justice 200 

Department of Transportation 198 

National Aeronautics and Space Administration 192 

Environmental Protection Agency 167 

Social Security Administration 150 

Department of Labor 147 

Department of Housing and Urban Development 91 

General Services Administration 85 

Department of Veterans’ Affairs 77 

Smithsonian 62 

Department of Education 44 

Small Business Administration 24 

Equal Employment Opportunity Commission 23 

National Archives and Records Administration 21 

Federal Communications Commission 19 

26 
Impacts and Costs of the October 2013 Federal Government Shutdown 

National Labor Relations Board 18 

Nuclear Regulatory Commission 18 

National Science Foundation 16 

Executive Office of the President 14 

Broadcasting Board of Governors 7 

Commodity Futures Trading Corporation 7 

Office of Personnel Management 7 

Corporation for National and Community Service 6 

Railroad Retirement Board 5 

Export-Import Bank 4 

Department of State 4 

Federal Deposit Insurance Corporation 1 

Department of Energy 1 

Government-Wide Total roughly 6.6 million 

27