WASHINGTON -- Warning of economic repercussions, the Obama administration said Wednesday that a government shutdown would halt the processing of tax returns and limit small business loans and government-guaranteed mortgages during peak home buying season.
Obama's administration sought to put the prospect in terms people would care about, even saying the beloved Cherry Blossom parade in the nation's capital would be wiped out.
The administration described shutdown planning as congressional negotiators continued to work to strike a deal that sets spending limits through the end of September. Negotiators have until Friday to reach an agreement before triggering a shutdown.
President Obama cautioned congressional leaders Tuesday that he would have them back at the White House Wednesday if they didn't make progress. Obama did call House Speaker John Boehner Wednesday morning. Boehner's office said the call lasted just three minutes and that the speaker told Obama he was hopeful a deal could be reached.
Obama left in the early afternoon for events in Philadelphia and New York. He boarded his Marine One helicopter at the White House with no comment, just a friendly wave to supporters.
Under the shutdown scenario described by the administration, the government would have to significantly cut staffing across the executive branch, including workers at the White House and civilian employees at the Defense Department; somewhere in the vicinity of 800,000 workers will be affected. Congress and the judiciary branch will also be subject to a shutdown.
The Federal Housing Administration, which guarantees about 30 percent of home mortgages, would stop guaranteeing loans. The issuance of government backed loans to small businesses would be suspended. And processing of tax refunds would halt for those who filed paper forms. Then again, so would tax audits.
Social Security and Medicare beneficiaries would continue to receive benefits. And taxpayers who file electronically will see no delay in processing of their returns.
Among other consequences cited by the administration:
- The Environmental Protection Agency would cease issuing permits and stop reviewing environmental impact statements which will slow approval of projects.
- Military personnel would not get paid beyond Friday, but would continue to earn money that would be paid to them once the government resumes.
- National parks would be closed.
- Most government websites would not be updated, unless they were deemed essential
(Copyright 2011 by The Associated Press. All Rights Reserved.)