Week Two of the Shutdown: Impact on 150 Agencies

October 11, 2013 By John Glenn

As week two of the government shutdown comes to a close, the impact on international affairs continues to emerge.  So far, the State Department and U.S. Agency of International Development have been able to largely avoid furloughs, even as they curtail broader engagement – from President Obama canceling his trip to Asia, to the Treasury Department likely to be short-staffed at the World Bank and IMF annual meetings that started today.

With signs that many domestic agencies are being forced to completely shut down or curtain their activity, how have State and USAID been able to keep the lights on?  According to Senator Patrick Leahy (D-VT), chair of the State-Foreign Operations Subcommittee, “The State Department has carry-over money from prior years and the ability to transfer funds between some accounts that will help contain the damage for a few weeks.”  Internal budget maneuvering has helped USAID keep its staff on the job, working on projects that have been budgeted beyond the current year.

What about other agencies supported by the International Affairs Budget?  The Overseas Private Investment Corporation (OPIC) and the U.S. Trade and Development Agency (USTDA) appear to be largely avoiding furloughs through multi-year funding, but the Millennium Challenge Corporation (MCC), Export-Import Bank, and Peace Corps re facing a very different situation.   According to CNN, the MCC will be essentially be closed in Washington as of Friday with 277 of its 283 DC employees furloughed, although country directors overseas will be able to stay on the job and compact implementation will continue. The Export-Import Bank has furloughed a majority of its employees, and the Peace Corps is largely closed in DC, but its overseas operations and support of volunteers will not be affected..

The possibility of a prolonged shutdown has created tremendous uncertainty across the board. While the Defense Department allowed most of its 350,000 furloughed workforce to return to work this week and Congress has agreed to provide back-pay for federal workers once an agreement has been reached, there is no sign yet that furloughed civilians at the MCC, Export-Import Bank, and USTDA will be able to return to work anytime soon.

Even if State and USAID are able to continue to support their staff, a long-term shutdown would likely cause widespread closures and furloughs. This is already causing many, including some Members of Congress, to express concern about the impact on America’s global engagement.  Congresswoman Nita Lowey (D-NY) said, “Neither our enemies abroad nor our global health and humanitarian challenges overseas ‘shut down’ with the federal government. Our engagement in these critical areas cannot be subject to political gamesmanship in Washington.”

Latest reports from Capitol Hill this afternoon have Congress and the President discussing the terms of a deal that would re-open the government and raise the debt ceiling.  We’ll be watching closely to see where we, and where America’s civilians who represent the face of the United States abroad, end up.

Correction: an earlier version of this post incorrectly identified the U.S. Trade and Development Agency having furloughed a majority of its employees.