LEILA FADEL, HOST:
A lot of federal employees won't be getting paid this Friday.
MICHEL MARTIN, HOST:
That is the first full paycheck they will miss as a result of the government shutdown. So far, the economic fallout from the shutdown, which began three weeks ago, has been limited. But analysts say the longer it drags on, the bigger the dent it may leave.
FADEL: NPR's Scott Horsley joins us now to talk about this. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: OK, so we know it costs money to run the federal government, but what does it cost not to run it?
HORSLEY: Yeah, there is a price to be paid for all this. There's work that is not getting done. Some of that work will have to be made up later. You've got hundreds of thousands of federal employees who are either furloughed, or in some cases, working without pay. Economist Brett Ryan of Deutsche Bank says most people can go a little while without a paycheck but, you know, not indefinitely.
BRETT RYAN: You know, they have mortgage payments to make. They have credit card payments. They got kids' tuition. Like, everybody's got bills to pay.
HORSLEY: By law, federal workers are supposed to get back pay once the shutdown ends. But, you know, the White House has tried to cast doubt on whether that's going to happen. So it wouldn't be surprising if some federal workers dial back their spending. And of course, that affects all the businesses those workers typically patronize.
FADEL: Yeah. Who else is paying a price for the shutdown so far?
HORSLEY: Well, a lot of government contracting has been halted. And unlike federal employees, contractors are not guaranteed to be made whole once the shutdown ends. Bernard Yaros is with the global advisory firm Oxford Economics. He estimates that every workday the shutdown goes on, some $800 million worth of contracts are not being awarded. Now, again, a lot of that work is merely postponed, not scrapped. But Yaros says about half those contracts would typically go to small businesses, and they may be getting impatient.
BERNARD YAROS: What we know about small businesses is that they tend to have relatively thin cash buffers. So the risk is that you start to put some of these small businesses into financial stress, and as a result, they have to furlough workers themselves, cut pay or even lay off workers outright.
HORSLEY: And of course, the shutdown is also affecting government functions that typically help the economy run smoothly, like air traffic controllers. You know, we've seen flights delayed and even canceled because controllers who were already short-handed are now even more so.
FADEL: Are there any big speed bumps to watch for?
HORSLEY: Yeah, a big one could come at the beginning of next month. You know, if Congress doesn't resolve this by then, the food stamp program, which helps to feed more than 40 million people, may not be able to pay SNAP benefits in November. And Yaros says that would have an immediate effect not only on those families but on the whole U.S. food chain.
YAROS: That would be a shock, you know, a hit if that goes away. That's where you would be very concerned about the effects of people really pulling back on their consumption if those SNAP benefits go away.
HORSLEY: And Yaros says that would be felt most acutely in the South and in the West, where families are most heavily reliant on food stamps.
FADEL: Do we have a good idea of what the total price tag of the shutdown is so far?
HORSLEY: You know, we really don't. Experience shows that past shutdowns have been costly both for the government and for the broader economy. But part of the challenge here is the government economists who ordinarily tally that price tag have themselves been idled by the shutdown. You know, we didn't get the usual jobs report earlier this month. A lot of other economic snapshots have been delayed. The one exception is the September inflation report. That is going to come out on Friday, albeit nine days late. Some government number crunchers were actually called back from furlough just to finish that report because Social Security needs it to calculate next year's cost of living increase.
FADEL: NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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