Government Shutdown: The Current State of Affairs

January 17, 2019

As we enter the 27th day of the partial government shutdown, there is still no end in sight. Both the Senate and the House adjourned last week making this the longest shutdown in U.S. history. This week, a bipartisan Senate effort to end the shutdown failed. Below is a brief overview the shutdown and its impact on the independent supermarket industry.

How did we get here?

A government shutdown is when non-essential discretionary federal programs close. This occurs when Congress is unable to pass the necessary appropriation bills or continuing resolutions to fund the federal government. About 75 percent of the federal government had already been funded before the shutdown, while other agencies that were not funded operated under continuing resolutions. These expired on December 21, 2018, which has led to the current shutdown.

Prior to the lapse in government funding, the Senate passed a short-term spending bill on December 19, 2018 to keep affected departments running into February 2019. However, the bill did not include the $5 billion in funding for the border wall and was rejected by President Trump.

How is this government shutdown different from previous shutdowns?

A government shutdown is nothing new. There was a 16-day shutdown in 2013 and in 1995-1996, a government shutdown lasted three weeks from December to January. The cause of this was budget disagreements between President Bill Clinton and House Speaker Newt Gingrich. This current shutdown impacts less federal employees since it is only partial, as approximately 75 percent of government funding has already been approved.

Where are we now?

Many components of the government are still shut down with no path forward. 9 out of 15 federal departments are closed, and 800,000 employees have been furloughed.

How does the shutdown impact independent grocers?

SNAP (Supplemental Nutrition Assistance Program)– The government shutdown has had serious effects on SNAP. 2500 retailers across the country have experienced a lapse in their SNAP licenses, and many other retailers have been unable to acquire SNAP licenses for new or purchased stores. 95% of USDA Food and Nutrition (FNS) staff are currently furloughed, which has made it difficult for grocers to receive assistance with questions and technical difficulties.

Last week, USDA announced a plan to protect SNAP benefits in February. However, for SNAP participants to receive February benefits, USDA is advising all states to request approval to issue SNAP benefits on or before January 20, 2019. This means that some SNAP customers in certain states will receive their February SNAP benefits before their January benefits, depending on the normal distribution schedule employed by the state for the month of January. USDA has not yet announced a plan for distribution of March benefits.

Women, Infants and Children (WIC) – USDA has confirmed that WIC will continue to operate through February at the state level. However, at this point in time additional Federal funding will not be provided during the period of the lapse and a prolonged shutdown would deprive WIC agencies of resources.

Food Safety Inspections- USDA will continue regulatory inspections of meat, poultry, and egg products essential to public health during the shutdown. The FDA has also stated that it will continue to screen food and drug imports.

E-Verify-  E-Verify is unavailable during the shutdown. Employers will not be able to access their accounts.

Internal Revenue Service (IRS)- The IRS has announced that it will bring back 57% of its employees to work during tax filing season, which is set to begin as scheduled on January 28, 2019. The Administration has also stated that the IRS will continue to process and deliver tax refunds during tax filing season.

If you have any questions about the effects of the shutdown on the independent supermarket industry, please contact Chris Jones, NGA’s Vice President of Government Relations and Counsel at cjones@nationalgrocers.org or Molly Pfaffenroth, NGA’s Director of Government Relations, at mpfaffenroth@nationalgrocers.org.