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News and updates

Shutdown: Day Two

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As the federal government shutdown enters day two, there are no signs of a quick resolution. Instead it now appears that this shutdown could last for a couple of weeks and will only be resolved as part of a larger deal to increase the debt limit in exchange for concessions on government spending and maybe even on health reform implementation.

Yesterday House Republicans brought up three bills to fund specific areas of government through December 15th. These “mini-CRs” would allow temporary funding for the National Park Service and the Department of Veterans Affairs, as well as allow the District of Columbia to use its own revenue to keep operating. The Democrats dismissed the tactic and reiterated their demand for a “clean” CR free of policy riders that would defund or delay the health-care overhaul. All three measures were called up under a suspension of the rules, which meant they required a two-thirds majority to pass. Only a handful of Democrats broke ranks to support the bills and so they all were defeated. All three measures will be brought up again this morning under regular rules so they can be passed by a simple majority, but they have little chance of advancing in the Senate and also drew a White House veto threat on Tuesday.

All of the political antics over the CR is just the opening act of what many are predicting will be a much bigger battle as the federal government is due to hit it borrowing limit on October 17th. The shutdown could continue until then and used as leverage to bring about a “grand bargain” that would resolve the debt limit, FY14 funding, and sequestration, as well as opening up ongoing negotiations on a long list of policy provisions favored by Republicans. They could include delaying implementation of the health care law for a year, instructions for a revenue-neutral tax overhaul, approval of the Keystone XL pipeline, a rewrite of financial regulations, new spending cuts, and other changes.

But absolutely nothing is certain right now except that federal government remains closed and Members of Congress continue to play the blame game.

Shutdown: Day One

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The federal government shutdown is now in full effect. Initially many federal workers were allowed to go into work this morning to receive furlough notices and implement shutdown plans – cancelling meetings, setting up out-of-office replies on email, and dropping off their Blackberries with IT personnel. And while there are some federal workers who have been deemed “essential personnel” and are lucky enough to be at work, there is no guarantee that they will be paid.

On Capitol Hill, elected officials are still discussing ways to move forward and get government up and running again. The Senate Democratic leadership, with support from the White House, continue to push for a “clean” continuing resolution (CR) to run through November 15th and allow time to come to agreement on how best to fund federal government for FY14. House Republican leadership continue to argue that health care reform delays must be included in any CR in order to get support from a majority of their members.

In a surprise (not) move, House GOP has announced that this afternoon they will bring up for consideration three separate CR bills to continue funding National Park Service and the Department of Veterans Affairs, as well as allow the District of Columbia to use its own revenue to keep operating. The bills will not include extraneous policy riders regarding health care reform and would allow some key federal operations to resume while larger negotiations continue surrounding the FY14 funding. All of the mini-CRs would run through December 15th and fund agencies at the same level as proposed under the comprehensive CR that both chambers have been battling over for the past week and a half.

Senate Democrats have already indicated that they will not support the GOP’s piecemeal approach.

Shutdown Basics

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Barring a last-minute burst of bipartisanship in Congress, the federal government will partially shut down at 12:01am Tuesday (October 1st) – the start of the new fiscal year. The White House Office of Management and Budget (OMB) has collected most current agency contingency plans here. Below is a quick breakdown of how a shutdown will likely affect select federal agencies and activities.

Education: A shutdown of the federal government will hit the US Department of Education hard. About 90 percent of the department’s 4,225 employees will be immediately furloughed, and most won’t come back until the funding crisis is resolved, even if the shutdown lasts longer than a week. But many schools and colleges won’t feel an immediate effect if the funding crisis is resolved quickly. Federal dollars will continue to flow to both K-12 and higher education. A longer shutdown, though, could lead to a big paperwork backlog and problems for schools, colleges, and students that receive federal funds.

  • Department staffing – ED will immediately furlough most of its employees, with the exception of a skeleton staff of appointees requiring Senate confirmation, their support staff, and the minimum number of employees necessary to oversee student loans and Pell Grants.
  • Formula funding to states – $22 billion already funded for FY2013 will continue flowing under Title I and II, IDEA, and career and technical education.
  • Student financial aid – While Pell Grants and student loans will continue to be paid out, as well as Supplemental Educational Opportunity Grant and federal work-study programs, but the Department staff that administer these programs will be furloughed.
  • Grants – Grant processing for Race to the Top, Investing in Innovation, and Promise Neighborhoods will lapse for a week. Other grant programs that don’t have any leftover money can’t incur new obligations until the funding crisis is resolved.

Continue reading “Shutdown Basics”

Impacts of Potential Government Shutdown

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At this point, it does appear that we are headed for the first government shutdown in 17 years. The House amended and approved the CR that the Senate sent to them on Friday, so that bill now goes back to the Senate. But because the House amended bill contains language to delay implementation of the health care law, Senate Democrats are not likely to accept that language. At this point, it is anticipated that the Senate will attempt to amend the bill (AGAIN) to strip out the health care implementation delay but certain Senate Republicans are expected to object to that process and therefore prevent the bill from further consideration. They will work on this all day Monday, and then admit defeat sometime late Monday night.

So, what should we expect? The Office of Management and Budget (OMB) is the best place to get up-to-date information on how individual agencies will respond to shutdown. They now have a web page that includes the list of contingency plans for each federal agency.

The good news is that the Pell Grant programs and other federal student aid programs (grants and loans) will continue to operate through a government shutdown.

Normally, routine, ongoing operational and administrative activities relating to contract or grant administration (including payment processing) cannot continue when there is a gap in funding. Therefore, agency employees who are paid with annual appropriations and who perform an activity associated with contract or grant administration (including oversight, inspection, payment, or accounting) should generally not continue work during a funding hiatus.

However, active grant and contract activity funded with FY2013 (or prior year) appropriations can continue. However, agency personnel most likely will not be available for approvals, supervisory support, and other administrative functions.

The Office of Federal Relations will continue to monitor this situation. There won’t be much action again until Monday so we’ll know more in 24-36 hours.

Senate Sends Amended CR Back to the House

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Today, the Senate approved an amended version of the House-passed Continuing Resolution (CR) to keep the federal government running when the fiscal year ends on September 30th. The Senate-amended version strips out the House language defunding the Affordable Care Act (ACA) and changes the end date of the CR from December 15th to November 15th.

The bill now goes back to the House for consideration. House leaders are expected to amend it further and send it back to the Senate. House conservatives are pushing for an amendment to delay implementation of the ACA individual mandate for one year. House leaders may also put forward a short one or two week CR to keep government funded while they continue to negotiate a longer-term agreement with Senate Democrats and the White House. House GOP leadership will meet tomorrow to determine their course of action.

The situation remains very fluid. If both chambers do not pass the same bill and send it to the President for his signature by October 1, the federal government will shut down.