I’m Taylor Sohns, CEO of LifeGoal Wealth Advisors, CIMA, and CFP. I’m often asked what a government shutdown really does to daily life. The short answer is this: some services continue to operate, while many workers remain unpaid. The longer the situation persists, the greater the strain on the economy. In this piece, I outline what remains open, what closes, and how the politics fuel the pain.
What Stays Open and What Slows Down
Some essential services continue to operate. That does not mean everyone gets paid on time. It also does not mean businesses avoid delays. Here is the practical impact you can expect right away.
- Social Security and Medicare: Open. Benefits continue to flow.
- TSA and Border Patrol: Open, but many agents work without pay.
- Mail: Still coming. The postal service continues deliveries.
- Federal Courts: Open until reserve funds run out.
- Permitting: Delays or closures for housing, energy, and other federal approvals.
- Congress and the White House: Open. Lawmakers still receive pay.
These realities matter for families and businesses. Benefits keep households afloat. Air travel and border operations continue. But unpaid workers face stress. Delays in courts and permits slow down deals, projects, and hiring.
“Every day this drags on $400,000,000 in paychecks don’t go to federal workers.”
That number adds up fast. Missed paychecks ripple into rent, food, and local spending. Small businesses near federal sites often feel the impact first. Restaurants, childcare centers, and contractors see fewer customers. If the shutdown stretches, the damage grows.
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Why It Hurts Even If You Still Get Benefits
Your Social Security check may still arrive. But the broader economy can take a hit. When hundreds of thousands of workers miss their pay, they pull back on spending. That reduces sales tax receipts. It also weighs on local job growth.
Delays in permits can freeze housing and energy projects. A stalled housing permit can hold up construction crews, material deliveries, and financing. That hurts wages and profits along the chain. Energy projects face similar slowdowns. When projects stop, the related jobs pause too.
Federal courts can continue to operate for a time using their reserves. Once those reserves are depleted, activity may be reduced. That can slow legal approvals, settlements, and other processes that businesses need to move forward.
The Politics Behind the Shutdown
This is not about the government running out of money overnight. It is about a standoff. Parties set demands and hold their ground. The result is pain for workers and citizens who have no seat at the table.
“Republicans are demanding cuts. Democrats are pushing to protect health care programs. And Trump, he’s leaning in hard using it as an excuse to cut federal workers permanently.”
That is the political fight in plain terms. Republicans push for spending cuts. Democrats aim to protect Medicare and other health programs. Donald Trump’s stance adds pressure on the federal headcount. While they argue, regular people face missed income and slower services.
Shutdowns are not a savings tool. They create backlogs and incur additional costs in cleanup once the doors reopen again. Agencies must restart projects, reprocess permits, and catch up on cases. That takes overtime and extra staff hours. The weak link is trust. Workers and businesses hesitate when they think more shutdowns may be on the way.
How This Hits Households and Businesses
Federal workers who must report to work still do their jobs. Many people do not receive their payments on time. That creates complex tradeoffs. Which bill gets paid first? Which purchase can wait? Savings must stretch. Late fees can mount.
Contractors working with federal agencies often see their work paused. Invoices wait. Vendors go unpaid. Smaller firms feel the strain faster. Some must cut hours or pause hiring. That hits local communities where these firms operate.
Travel continues with TSA on the job. But low morale and financial stress can affect staffing. Sick days may rise. Wait times can grow. The same is true at the border. These are tough jobs in the best of times. Doing them without pay adds stress.
Courts and permits impact business timelines. A delayed permit can push a project into another season. That can change financing terms or material costs. Some deals fall apart. Others restart later at higher prices. The longer the shutdown lasts, the larger the fallout.
Key Points to Keep in Mind
- Essential benefits, such as Social Security and Medicare, continue.
- Many federal workers report to duty without pay until funding returns.
- Permitting and some agency work stalls, slowing housing and energy projects.
- About $400 million in paychecks are missed each day of a shutdown.
- Local businesses near federal operations experience a decline in sales quickly.
What You Can Do Right Now
If you rely on Social Security or Medicare, your benefits should continue. If you are a federal worker, plan your cash flow carefully. Contact your landlord, lender, or utility provider as soon as possible. Many offer flexibility during shutdowns.
Households can tighten budgets. Pause large purchases where possible. Build a small cash buffer. Even a few weeks of expenses can help. Keep records of any missed pay and related costs. You may need them later for repayment or support programs.
Businesses that count on federal contracts should review cash reserves. Speak with banks about short-term credit lines. Delay nonessential spending. Check with legal counsel about contract terms and timelines. Effective communication with staff and clients is crucial. Set clear expectations for project delays.
Markets, Confidence, and Timing
Markets tend to watch the length of a shutdown, not just the start. A short event may cause little long-term damage. A prolonged event can erode consumer confidence and impact business plans. Investors often monitor jobless claims, retail sales, and small business surveys for early indications of economic stress.
Confidence is fragile during a shutdown. People worry about mortgage payments and student loans. Firms worry about payroll and project schedules. The longer the uncertainty, the more plans get cut or delayed. That can slow growth even after the government reopens.
The Human Factor
Behind every missed paycheck is a family making hard choices. Kids still need food and school supplies. Rents are due. Car payments are due. That stress spreads through neighborhoods.
It is easy to talk in numbers. It is harder to see the day-to-day strain. Many public servants continue to work without pay. They serve travelers, protect borders, and process benefits. They deserve clarity and timely pay for essential work.
Where This Leaves Us
Shutdowns are often political fights that disproportionately affect regular people first. Benefits like Social Security and Medicare continue, but the hidden costs stack up. Workers go unpaid—projects stall. Small businesses suffer. Each day, $400 million in missed pay is lost, and that money would have been spent in local communities.
I do not say this to spark fear. I say it to help you prepare and plan. If you rely on federal income, tighten up spending and reach out to creditors early. If you run a business tied to federal work, hold cash, stay close to your bank, and keep your team informed. The sooner lawmakers end the standoff, the faster the economy can heal. Until then, control what you can and keep your plan flexible.
Frequently Asked Questions
Q: Will Social Security and Medicare payments stop during a shutdown?
No. Benefit checks for Social Security and Medicare continue. Some support services may be slower, but monthly payments are expected to go out as scheduled.
Q: How long can federal courts and agencies operate without full funding?
Courts can operate on reserves for a limited time. Many agencies scale back quickly. Nonessential work pauses. Timelines depend on each agency’s reserves and priorities.
Q: What should federal workers and contractors do to manage cash flow?
Contact lenders, landlords, and utilities early to request hardship options. Trim nonessential spending, build a small cash buffer, and document missed pay for potential relief later.
Reel: Taylor Sohns, CEO of LifeGoal Wealth Advisors, CIMA, and CFP
Photo by Aaron Kittredge; Pexels
