Oct 18, 2013

    Restarting US govt harder than shutting it

    IF YOU thought shutting down the United States government was tough, just wait until agencies try to open again for business.

    The legislation passed by Congress last night to raise the debt ceiling and fund the government into next year will bring hundreds of thousands of federal workers back to their jobs and reopen national parks and museums.

    Yet it may be weeks or even months before the government resumes issuing loans, payments and contracts at a normal pace.

    "This has been very disruptive," Mr Larry Allen, president of Allen Federal Business Partners, a contract consulting firm in McLean, Virginia, said in an interview. "The shock wave will last for months."

    The 16-day halt in operations at many federal agencies shaved at least 0.6 per cent from fourth-quarter gross domestic product growth this year, or taken US$24 billion (S$30 billion) out of the US economy, Standard & Poor's said on Wednesday.

    The cost of restarting the government is hard to tabulate.

    "Significant additional costs, which cannot be determined at this time, include interest payments to third parties" when the government doesn't pay its bills on time, said Mr John Koskinen, a former deputy director at the White House's Office of Management and Budget.

    "There will also be additional personnel costs necessary to deal with the backlog of work resulting from the shutdown," he added.