Federal workers in Hawaii who are worried about the shutdown of the federal government are likely already cutting back on local spending, adding to Hawaii’s already sluggish economy, according to the head of the University of Hawaii’s Economic Research Organization.
The longest shutdown in U.S. history occurred during President Donald Trump’s first term and lasted 35 days between December and January 2019 over Democrats’ refusal to fund Trump’s border wall with Mexico.
If another shutdown happens Wednesday when the federal government has to be refunded, federal workers are likely already cutting back on extra spending like dining out, further hurting local businesses, according to Carl Bonham, UHERO’s executive director.
“For anybody who serves areas with large numbers of federal employees, it’s going to be real,” Bonham said.
The threat of a shutdown comes as an additional 1,200 federal employees in Hawaii will leave the government workforce today after their delayed resignations go into effect that started under Elon Musk’s initial effort to purge the federal workforce.
It’s unclear which federal workers would be deemed “essential” if the government closes and would have to temporarily work without pay — and which would be furloughed and receive no pay.
But Trump has said that active-duty military and federal immigration agents would still work, albeit with delayed paychecks.
He also said he would use a government shutdown to force even deeper layoffs to further permanently streamline the size of the federal workforce.
Last time, air traffic controllers and TSA agents were required to work temporarily without pay and eventually started calling in sick as the shutdown persisted and Congressional members complained about long lines at the nation’s airports.
Also last time, Hawaii’s visitor industry and nonprofit organizations that operate tourist destinations around the Arizona Memorial — such as the USS Missouri — chipped in to keep the Pearl Harbor National Memorial open for visitors.
There have been some initial discussions about private donations to keep the memorial open this time, but any decisions would be up to the White House, according to David Kilton, who’s in charge of interpretation and education and visitor services at the Pearl Harbor National Memorial.
“There is the potential,” Kilton said. “We’ll have to see if that’s allowed.”
Kilauea continues to erupt — often spectacularly — and continues to be a key visitor attraction to Hawai‘i Volcanoes National Park.
The park responded to a request for comment with an email that read: “Congress is working through the appropriations process and we are hopeful that a lapse in appropriations will not occur. … Updated plans will be put online as soon as they’re finalized.”
Hopes of an agreement to keep the government running appeared slim on Monday after Democratic leaders left a meeting at the White House that failed to avert a shutdown.
“We’re not close,” U.S. Rep. Jill Tokuda told the Honolulu Star-Advertiser.
Congressional Republicans have already left Washington and were not scheduled to return until Oct. 7, meaning that a budget vote appears unlikely anytime soon, Tokuda said.
“Democrats don’t want this to happen,” she said. “Democrats are here doing the work while Republicans gave themselves the day off and went home or are traveling. Republicans are in the White House and have control of Congress. So this is on them. … Democrats are about putting people first.”
The main sticking point appears to be Democrats’ insistence that Republicans give up on their plans to raise premiums under the Affordable Care Act for millions of Americans, which would put increased economic pressure, especially on low-income families.
Trump also has Congressional support to cut Medicaid.
“We have to restore health care coverage,” Tokuda said. “These are very tense times right now.”
U.S. Sen. Brian Schatz said in an email to the Star-Advertiser that, “We’re doing everything we can to keep the government open. Democrats are ready to negotiate, but it’s up to Republicans to come to the table and work out a deal to prevent a shutdown and protect people’s health care.”
Tokuda’s staff will work without pay if a shutdown happens and are preparing a page on her Congressional website intended to answer questions about which federal function — like Social Security — may see reduced levels of service.
Social Security checks will likely still be processed, Tokuda said, “but it might be difficult to find someone to help you.”
Tokuda also plans to issue text alerts to call her office, and hopes to get information from employees on which federal operations are effected.
Her employees will be on call to help Tokuda’s neighbor island and rural Oahu constituents navigate through a shutdown and said, “they will be unpaid until we resolve this.”
If a shutdown stretches out for weeks, furloughed and unpaid federal workers will still have to put food on the table and pay the rent and may be forced to turn to a Hawaii social safety net that’s already stretched thin by Trump’s cuts to Hawaii nonprofit organizations, Tokuda said.
“Many people can’t miss a pay period or two,” Tokuda said. “So people start making decisions with their pocket books.”
In Hawaii, an estimated 25,000 people rely on their health care through the Affordable Care Act, Bonham said.
If Congress approves eliminating tax credits for the Affordable Care Act, Bonham said a Hawaii family of four could see their premium jump from $110 to $360.
Hawaii’s economy — driven by sluggish visitor arrivals — already has been forecast by UHERO to enter a “mild recession” next year.
So the threat of a federal government shutdown, on-going job losses and a struggling tourism industry means that families are already postponing vacations and major purchases, Bonham said.
“It disrupts plans,” Bonham said. “It disrupts life.”
Source: The Garden Island