Social Security. These payments are part of the mandatory budget. "In the original authorizing legislation, there is no provision for the federal government or Congress to deny these payments," says Jay Ryu, associate professor of public finance and budgeting at Ohio University. The offices are remaining open, but about one-third of all Social Security employees will be furloughed. That could slow down paperwork, applications and processing, Ryu predicts.
Medicare and Medicaid. These two programs are also mostly off the table, although Medicare may be subjected to some automatic, across-the-board reductions, Ryu says, thanks to the Budget Control Act of 2011, which was enacted as a compromise to end that debt ceiling crisis.
Federal retirement benefits. Federal retirement annuity payments will continue to be paid on time, the National Active and Retired Federal Employees Association, or NARFE, assures its membership. Also unaffected are life, health and long-term care benefits. NARFE does warn that government paperwork will be slowed.
Veterans Affairs retirement benefits. Veterans Health Administration hospitals and health care facilities remain open and operating, but the U.S. Department of Veterans Affairs put out a statement warning, "Claims processing and payments in the compensation, pension, education and vocational rehabilitation programs are anticipated to continue through late October. However, in the event of a prolonged shutdown, claims processing and payments in these programs would be suspended when available funding is exhausted."
Your 401(k) and other retirement savings accounts. This disruption could put a big damper on stock prices and investment returns, eating into retirement security.
This government shutdown is a prelude to a bigger problem -- that of the debt limit. A breach of the debt limit would cause havoc, and possible economic collapse could result if our country doesn't pay its bills.
"The 'full faith and credit of the United States government' is absolutely the most valuable economic asset we have," says Gerald Epstein, professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst. "It is the center of the world financial system. It allows us to borrow money at lower rates than any other government. Global faith in the credit of the United States is worth trillions of dollars to U.S. taxpayers and investors. Allowing our politicians to throw that away is liked flushing those trillions down the drain."
Tell your congressman you can't afford this and to get these issues resolved quickly.