WASHINGTON - As budget talks in Congress stood at an impasse Tuesday, federal workers and contractors across Minnesota began bracing for a government shutdown looming as early as Friday at midnight.
Mail and Social Security checks would still get delivered, along with other "essential" services, such as medical care at the Minneapolis Veterans Medical Center.
But Minnesota's five national parks and recreation areas would close and some of the state's largest institutions and businesses could see grants and contracts interrupted by a federal funding lapse.
How much depends on partisan differences that are pitting the Obama administration against GOP leaders in the U.S. House, where a Tea Party faction that includes Minnesota Republican Michele Bachmann is pressing for deeper cuts.
Facing a potential shutdown with uncertain political consequences, Bachmann downplayed the consequences should the two sides fail to reach a deal or bridge a gap of tens of billions of dollars for the fiscal year that ends in September.
"There is no such thing as a true government shutdown," Bachmann said at a Tea Party rally on Capitol Hill last week. "If government shuts down, it's actually a slowdown."
One twist that has received little attention in the budget debate is that state businesses could feel the shutdown before the public does.
From the University of Minnesota to Rochester's Mayo Clinic, federal contractors and large institutions here rely on hundreds of millions of dollars in federal contracts. That money would stop flowing after Friday.
"In a nutshell, any shutdown of the federal government would have a negative impact on the University of Minnesota," said Daniel Wolter, a spokesman for the university, which received $800 million in competitive research grants last year, most of which were federal.
A brief shutdown would cause only a ripple, Wolter said. In a protracted shutdown, he said, "the cash flow problem gets larger."
Students face less of a problem. Virtually all of the university's spring financial aid has been dispersed. Students who want to change their aid could be affected. But Wolter said "there are a range of options for dealing with these kinds of wrinkles, so it's fair to say it would amount to more of a hassle than anything else."
Mayo officials are keeping an eye on research funding from the National Institutes of Health (NIH). It accounts for 41 percent of Mayo's research budget.
"Mayo Clinic has developed detailed contingency plans," said Randy Schubring, Mayo's government relations spokesman. "We are confident that if a short-term shutdown does occur, it will not affect day-to-day research operations."
Prominent Minnesota businesses such as 3M, Cargill and Medtronic have contracts worth tens of millions of dollars for medical technology, research and military equipment. One of the state's biggest military contractors, Champlin-based Deco Inc., with more than $100 million in security contracts this year, is preparing for the worst.
"We enter our contracts knowing the government has the right to reduce or eliminate services anywhere in the world on a moment's notice," said Deco president and co-owner Derek Dorr. "If Deco is required to reduce services, we in turn reduce workforce."
If history serves as a guide, it's unlikely that a furlough for the state's estimated 10,000 federal workers will produce much savings for taxpayers.
Jane Nygaard, a retired VA nurse who went through the last government shutdown in the mid-'90s, said that in the end, even those non-essential government workers who were shut out of work for three weeks got all their pay.
"When the furlough was done, everyone got paid, whether you worked or not," said Nygaard, now national vice president for the American Federation of Government Employees District 8, which includes Minnesota.
Still on the job
Not only that, but after subtracting essential workers such as nurses, air-traffic controllers, meat inspectors, prison guards and border patrol agents, a big chunk of the federal bureaucracy stays in operation.
"Everyone talks about downsizing the federal government," Nygaard said. "But when you really talk about cutting services, all these agencies do things people take for granted."
Among the most conspicuous effects of a shutdown would be the shuttering of the national parks.
"We would just cease operations, which would include, most visibly, our visitor center," said Paul Labovitz, superintendent of the Mississippi National River and Recreation Area.
After a half-dozen, stop-gap funding measures since last October, Minnesota lawmakers in Congress were also making plans to stay in Washington over the weekend -- a sign there may be no deal by Friday.
"The speaker's got himself in a bind," said Minnesota Democrat Tim Walz, referring to Republican House Speaker John Boehner of Ohio. "I think they're gonna shut 'er down."
Meanwhile, Minnesota Republican John Kline, a close ally of Boehner, expressed his frustration at an impasse over just six months' worth of federal funding -- the remainder of the 2011 fiscal year. With an eye toward 2012's even bigger potential spending cuts, Kline said, "that's where the real debate is."
Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.