Federal Relations

April 8, 2011

Federal Shutdown Looms

A Thursday-night meeting between congressional leaders and President Obama failed to resolve an impasse over federal spending that, barring an agreement on Friday, would result in a federal government shutdown.  Federal government is currently operating on a continuing resolution (CR) that is set to expire at midnight tonight (Friday, April 8th).  If House Republicans and Senate Democrats are unable to reach an agreement on FY11 and no extension of stopgap funding is enacted today, most government operations will have to shut down.  The question of whether to include some controversial policy provisions for abortion funding and environmental regulations appears to be the last major hang-up. 

The House yesterday passed a one-week CR extension, which would also fully fund the Department of Defense for the remainder of the fiscal year.  Republicans argue that their bill, which would keep federal government operating for one week and cut an additional $12 billion in domestic spending, was needed to prevent a shutdown and ensure that US troops would be adequately funded.  House Democrats sought to substitute a simple one-week extension – with no policy riders – but were unable to get a vote on their proposal.  Senate Democrats have said the bill is a “non-starter” in that chamber and the President said he would veto the measure if it ever reached his desk. 

Also yesterday, OMB Director Lew issued guidance to agencies regarding their preparations for a possible shutdown.  Lew’s memo details the actions agency heads must take if a shutdown is ordered, including the distribution of furlough notices to “non-excepted” employees (i.e., those who are not considered “essential”).  The memo also details certain agency and employee activities that are and are not allowed during the time an agency is not funded.  Among the activities that continue will be military actions, customs and border protection activities, core federal law enforcement, air traffic control operations, postal services, and meat and poultry inspection.