March 29, 2024

Federal Agencies Lay Out Contingency Plans for Possible Shutdown

Each cabinet-level department and federal agency was required to identify essential personnel and determine which operations would continue if no deal were reached by Tuesday, the first day of the new fiscal year.

Although huge parts of the federal bureaucracy could be forced to close, many government functions would continue.

Senior Pentagon officials said on Friday that the more than 1.3 million active military personnel would remain on duty during a shutdown but would probably not receive their paychecks until a spending agreement was reached. The service members and civilians who stay on the job would be categorized as essential to the protection of life and property and to national security.

About half of the Defense Department’s approximately 800,000 civilian employees would be furloughed without pay.

There is little question that troops deployed to Afghanistan would continue their missions, as would warships now off the coast of Syria to pressure President Bashar al-Assad’s government to adhere to a plan to surrender its chemical weapons stockpile.

Documents released on Friday by the Pentagon listed essential duties that would be carried out during a government shutdown, including recruitment, intelligence and surveillance, fire protection, counseling and other services for sexual assault victims, operations of mortuary facilities for fallen service members, and a broad range of medical care.

The military is one of several departments whose employees are considered essential for national security purposes. The Department of Homeland Security, which comprises organizations like the Secret Service, Customs and Border Protection and the Federal Emergency Management Agency, would have to furlough roughly 14 percent of its employees, far lower than many other cabinet-level agencies.

Nearly all of the F.B.I.’s roughly 16,000 agents and analysts at its headquarters and its 56 field offices across the country would continue to work because they are considered essential to protecting the country. “Nonessential” employees like carpenters and dock employees who unload shipments would be told to stay home.

Most employees of the State Department would continue to report to work, domestically and abroad. Most overseas employees, and many of the people working in Washington to support them, would be considered essential because of their diplomatic and national security functions.

Much of the State Department operates outside the normal Congressional appropriations process, meaning many bureaus and offices would remain open. Most passport offices, for example, would continue to process applications normally because the department’s consular function is financed largely through fees.

Although more than half of the Department of Health and Human Services would be furloughed, Medicare and Medicaid beneficiaries would continue to receive services. Retirees would continue to get checks from the Social Security Administration.

The rollout of President Obama’s health care law, with the first insurance marketplaces to go online starting on Tuesday, would continue because most of the money for that program was provided by the Affordable Care Act and other laws.

The Food and Drug Administration would continue some vital activities, like product recalls and the inspection of imports, but would curtail many other food safety activities.

National parks and their visitor centers would be closed, but other Interior Department operations would carry on. Approximately 500 Fish and Wildlife Service employees, whose salaries are paid by a permanent appropriation, would continue caring for animals at parks and hatcheries. At the United States Geological Survey, employees would continue to monitor equipment to forecast floods or detect earthquakes and volcano activity. Native Americans would continue to receive benefits payments, and the Bureau of Indian Education would operate its schools.

The District of Columbia, whose budget is approved by Congress, would normally be required to send home all but its most essential employees, shuttering services like public libraries and the Department of Motor Vehicles.

But in protest of Congress’s inability to agree on a spending measure, Mayor Vincent C. Gray informed the Office of Management and Budget that he had deemed all district employees to be essential.

While Mr. Gray’s gambit seemed legally tenuous, the chairman of the City Council, Phil Mendelson, was expected to hold a vote on Tuesday on legislation that would allow the city, during a federal shutdown, to pay its employees from a contingency reserve fund.

Robert Pear contributed reporting.

Article source: http://www.nytimes.com/2013/09/29/us/politics/federal-agencies-lay-out-contingency-plans-for-possible-shutdown.html?partner=rss&emc=rss

Mortgages: On Floods and Rising Insurance Premiums

Premiums for the National Flood Insurance Program are certain to rise in coming years as a result of a Congressional mandate to bring them into line with real risk levels. The question is, by how much?

The Federal Emergency Management Agency is updating flood hazard maps to assess present-day risks, but until the redrawn maps are finalized, and the rates revised, neither homeowners nor mortgage lenders can accurately estimate the affordability of future premiums.

FEMA is also phasing out the subsidized rates granted to policyholders with homes built before local flood maps were first drawn. The agency estimates that about 20 percent of the 5.5 million policyholders receive these subsidies.

The unknowns around flood insurance rates could pose a problem for lenders, especially because, under the terms of the Dodd-Frank Act, they must document a borrower’s ability to repay a mortgage over the life of the loan, said Doug Rossbach, a vice president in charge of the mortgage banking practice at North Highland, a global consulting firm based in Atlanta. “Premiums could go skyrocketing,” he said. “The lender is in a pretty tough spot. How can the lender know if the borrower can afford to stay in the property, or spend the money to elevate that property?”

Once the maps are revised, some coastal property owners who don’t pay for flood insurance may have to. Lenders haven’t necessarily recognized that yet, as Mr. Rossbach recently discovered when he applied to refinance his house in Rumson, N.J. His house flooded during Sandy, and although he hadn’t been in a flood zone before, preliminary map revisions show that he will be. The lender “never asked me about flood insurance,” he said, “because the effective maps don’t show me in a flood zone. But lenders are beginning to pick up on this, and it’s going to make it tougher for the consumer.”

Chad Berginnis, the executive director of the Association of State Floodplain Managers, noted that homeowners in high-risk areas can significantly cut their premium — which could go as high as $30,000 a year — by elevating their house above the flood level. Homes with structural changes that make them less flood-prone are also likely to rise in value, he said. But, he added, the construction costs can be daunting.

In the Jersey Shore town of Toms River, inland houses are selling, but when it comes to the Sandy-affected properties on the waterfront, “unless you’re giving homes away, no one is buying or selling,” said James A. Flanagan, the broker of record at Coldwell Banker Flanagan Realty. The “big box” lenders are not making loans, leaving it to a few local banks. But even then, Mr. Flanagan said, “buyers want to know, what’s my flood insurance going to be, and I can’t blame them.”

Most of the owners he knows have repaired the damage to their homes, generally using insurance money and their own funds. Now, he said, they are waiting to find out whether they need to raise their houses, what it will cost, and how much they will ultimately pay in flood premiums.

“It’s got us in a pretty good pickle down here,” he said.

A recent report commissioned by FEMA suggests that more homeowners will be confronted with this dilemma in years to come.

The report predicts that, because of climate change, rising sea levels and population growth, the portion of the country at risk for flooding will rise by 40 to 45 percent by 2100.

Article source: http://www.nytimes.com/2013/07/14/realestate/on-floods-and-rising-insurance-premiums.html?partner=rss&emc=rss