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The Government Shutdown's Effect on Kentucky

A Republican Shutdown Would Hurt Kentucky’s Economy and Middle Class

A shutdown could delay financial support for Kentucky’ small businesses. In FY12, the SBA’s flagship 7(a) and 504 loans programs supported 571,383 jobs and approved 53,847 applications over the course of 12 months, including 471 in Kentucky for a total of $164,510,200 in loans. On average, $476,841 in loans was approved for small businesses in Kentucky each day. [Small Business Administration FY14 Budget Justification; SBA]

A shutdown could put one-in-four of Kentucky’s 25,000 federal employees out of work. Federal employees around the country would potentially be furloughed in the event of a government shutdown. These workers may see reductions in their pay from the time they were forced to stay home because the government was shuttered. Nationwide, more than 800,000 federal workers, accounting for approximately 28% of the federal workforce, are facing furlough. [Census; Washington Post, 9/23/13; Wall Street Journal, 10/1/13]

Social Security services will be stalled. Although checks for current Social Security benefits would still go out during a shutdown, many Social Security services will be not be available such as obtaining a replacement Social Security card and preventing improper Social Security payments. As a result of furloughs and service cuts during the last shutdown, 800,000 callers were denied service on the Social Security Administration’s 800 number. In 2012, 930,153 people received Social Security benefits in Kentucky. [SSA History; SAA, 2012]

A shutdown endangers benefits owed to our nation’s veterans. The VA will run out of money to pay mandatory benefits for existing beneficiaries by the end of October. This would affect disabled veterans, poor wartime veterans, survivors, and students. Many veterans call centers, regional offices, and business centers will be closed to the public. During the 1995-96 shutdowns, more than 400,000 veterans saw their disability benefits and pension claims delayed, while educational benefits were delayed for 170,000 veterans. Kentucky is home to 339,334 veterans. [Army Times, 2/3/11; CNN, 1/4/96; VA; Army Times, 9/28/13; Washington Post, 9/27/13; VA, 2013]

A government shutdown compromises young children’s school readiness. A government shutdown could delay funding for 22 Head Start providers across the country, jeopardizing early childhood education and care for the 18,000 children and families those programs serve. Ongoing grants to these 22 organizations were scheduled to be renewed in October. During FY12, an estimated 1,600 Head Start agencies served over 950,000 children, including 16,938 children in Kentucky. [CAP, 4/11; HHS; CRS, 1/9/13]

A shutdown would end nutritional support for pregnant women and children. If the government shuts down, the Women, Infants, and Children (WIC) program will only be able to continue to serve participants for one week. After that, no federal funds would be available to support WIC’s clinical services, food benefits and administrative costs. Average monthly participation in FY12 totaled more than 8.9 million, including 4.7 million children and 2.1 million infants. In FY13, roughly 129,574 women and children in Kentucky participated in the WIC program. [USDA, 9/27/13; FNS, 9/6/13 USDA, 9/6/13]

A shutdown stops support for small businesses to grow and sell their products abroad. During a shutdown, the Export-Import Bank stops all new financing for U.S. exporters. In FY12, the Bank helped support an estimated 255,000 American jobs at 3,400 companies throughout the United States. 88% (3,313) of all the Bank’s transactions were for small businesses totaling $6.1 billion. In 2012, 76% of the exporters in Kentucky assited by the Bank were small businesses. [Ex-Im; Ex-IM, 2012]

A shutdown would cut off critical infrastructure investments. In the event of a shutdown, the Federal Transit Administration will be unable to process any grants to transit systems for construction projects or operations. Recently, those payments have totaled $198 million per week. In FY12, Kentucky received $61,515,557 in funding for ongoing transportation and constructions projects. [FTA, 9/26/13; FTA, 2012]

National parks, wildlife refuges, and recreational lands are closed. Due to the Republican government shutdown, nearly one-thousand national parks, wildlife refuges, and recreational lands across the nation are now closed. These closures come at a significant cost for neighboring local communities that rely on tourism revenue. Approximately 6,613 people visiting national parks in Kentucky will be turned away each day the government remains closed. The economic impact of these closures will result in nearly $347,006 of lost revenue each day for local communities. [National Parks Conservation Association]