Shutdown Basics

Posted on September 30, 2013October 2, 2013

Barring a last-minute burst of bipartisanship in Congress, the federal government will partially shut down at 12:01am Tuesday (October 1^st) – 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.

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Impacts of Potential Government Shutdown

Posted on September 29, 2013

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

Posted on September 27, 2013

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 30^th. 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 15^th to November 15^th.

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.

To Shutdown, or Not to Shutdown…

Posted on September 26, 2013

That is the question on everyone’s minds. Today the Senate will offer amendments to the House-passed continuing resolution with the expectation that they will vote on the modified bill no later than Sunday and send it back to the House for consideration. House Republican leadership is already formulating a strategy to further modify the Senate-amended CR and possibly send it back to the Senate again. That measure could contain a one-year delay of the health care law that would draw broad Democratic opposition and a White House veto threat – not to mention that the clock will likely run out and send us into a government shutdown. The House GOP is also reserving the option of passing a “clean” one-week CR to avoid a partial government shutdown while negotiations continue.

The Office of Federal Relations will continue to monitor the situation and provide further updates throughout the week and into the weekend.

Eight Days to End of Fiscal Year

Posted on September 23, 2013

There are just eight days left in the current federal fiscal year yet there is no certainty as to how lawmakers will resolve their partisan differences before October 1^st. The continuing resolution (CR) approved by the House last Friday will be the focus in the Senate where they will attempt to modify the bill before sending it back to the House for consideration. The House, meanwhile, will shift their immediate attention to a proposal to raise the debt ceiling until after the 2014 November elections.

Continuing Resolution: Senate Democrats will greatly modify the House passed CR to strip it of language defunding the Affordable Care Act (ACA) and keep government funded at current levels. They will send that back to the House where Republican leadership may or may not find enough votes to approve the modified version of the bill. This could lead to a series of back and forth votes between the House and Senate in an effort to avoid a government shutdown if there is no deal by next Monday.

But even a clean, level-funded CR may face opposition from some House Democrats who continue to argue that austerity spending plans are harming the economy and threatening job growth since a level-funded CR would trigger automatic, across-the-board cuts (sequestration). However, those cuts would not begin until January so Congress could still pass separate legislation late in the year to undo them.

Debt Ceiling: Meanwhile, House Republican leaders are drafting a debt limit bill that will likely be unveiled next week and would remove the ceiling on federal borrowing authority beyond the 2014 elections. And, just like their CR, it would delay implementation of the ACA, as well as cut mandatory spending, provide instructions for a tax overhaul, and promote deregulation and energy development.

Although the White House would not necessarily object to a debt limit suspension mechanism, the House plan would be laden with provisions the White House and congressional Democrats oppose. Obama has said he wants a clean debt limit increase before it expires in mid-October and he has ruled out negotiating over an increase in borrowing authority.