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The Nation

April 6, 2011

Obama administration: Shutdown would hurt economy

WASHINGTON — Warning of economic repercussions, the Obama administration said Wednesday that a government shutdown would halt the processing of tax returns and limit small business loans and government-guaranteed mortgages during peak home buying season.

The administration said that the Internal Revenue Service would suspend the processing of paper tax returns, though it would continue to deal with electronic returns. The Federal Housing Administration, which guarantees about 30 percent of home mortgages, would stop guaranteeing loans.

Social Security and Medicare beneficiaries would continue to receive benefits.

The administration described shutdown planning as congressional negotiators continued to work to strike a deal that sets spending limits through the end of September. Negotiators have until Friday to reach an agreement before triggering a shutdown.

The administration sought to put a human face on the fallout of a shutdown, casting it as a potential blow to the economic recovery.

Among other consequences cited by the administration:

—The Environmental Protection Agency would cease issuing permits and stop reviewing environmental impact statements which will slow approval of projects.

— Military personnel would not get paid beyond Friday, but would continue to earn money that would be paid to them once the government resumes.

— National parks would be closed.

— Most government websites would not be updated, unless they were deemed essential

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