What would be a fitting end to 2018, the year of unprecedented trade turmoil? How about a U.S. government shutdown? Well, NOT REALLY! – but it looks it may happen.
President Trump is poised to raise the ante against Congressional Democrats with that possibility. They oppose his request to designate a $5 billion line item for the border wall out of the proposed $4.4 trillion federal budget. As with other political matters, both sides are entrenched and resolute. Unless there is an agreement or an extension (continuing resolution), the deadline will arrive at midnight on Friday, December 21st.
Based on prior shutdowns and according to the U.S. Department of Homeland Security’s March 23, 2018 “Procedures Relating to a Lapse in Appropriations” report nearly eighty-eight percent of DHS employees across the departments shown below will continue to report to work throughout any shutdown period. This is higher than the average seventy-five percent among all federal government functions.
| DEPARTMENT OF HOMELAND SECURITY COMPONENT |
ACRONYM | TOTAL EMPLOYEES | TOTAL EXEMPT EMPLOYEES | PERCENT |
| Office of the Secretary and Executive Management | OSEM | 592 | 71 | 12.0% |
| Management Directorate | USM | 1,740 | 193 | 11.1% |
| Office of Intelligence and Analysis | A&O | 830 | 466 | 56.1% |
| Office of Inspector General | OIG | 793 | 263 | 33.2% |
| U.S. Customs and Border Protection | CBP | 59,072 | 54,143 | 91.7% |
| U.S. Immigration and Customs Enforcement | ICE | 19,749 | 16,079 | 81.4% |
| Transportation Security Administration | TSA | 58,390 | 53,941 | 92.4% |
| U.S Coast Guard | USCG | 50,608 | 44,003 | 86.9% |
| U.S. Secret Service | USSS | 6,968 | 5,815 | 83.5% |
| National Protection and Program Directorate | NPPD | 3,545 | 2,099 | 59.2% |
| Federal Emergency Management Agency | FEMA | 20,690 | 18,119 | 87.6% |
| U.S. Citizenship and Immigration Services | USCIS | 17,179 | 16,853 | 98.1% |
| Federal Law Enforcement Training Centers | FLETC | 1,292 | 66 | 5.1% |
| Science and Technology Directorate | S&T | 454 | 23 | 5.1% |
| Countering Weapons of Mass Destruction Office | CWMD | 234 | 86 | 36.8% |
| TOTALS | 242,136 | 212,220 | 87.6% |
The U.S. Customs and Border Protection (CBP) and other departments’ personnel are considered “exempt”, “essential” or “excepted” as defined within the Anti-Deficiency Act (ADA). As such, these employees may not get timely paychecks, however, they will be paid when the shutdown also known as the federal funding hiatus is resolved. An employee who refuses to report for work after being ordered to do so will be considered to be in an absent without leave status and may be subject to administrative or disciplinary action for not reporting for work.
This means, the ports should face minimal disruptions. However, there are many other federal agencies such as the U.S. Department of Agriculture that would furlough forty percent of its personnel that could affect particular transactions or trade lanes. And, remember it is still 2018, so anything can happen.
It is advisable to quickly brush up your business continuity plans. Check your emergency call trees so you can confirm communication with your supply chain partners to ensure your goods get through and you are aware of problems as they occur. Livingston International, as always, will remain diligent in monitoring trade developments and getting that news to our customers and partners.