View Full Version : A Guide To Government On The Brink Of A Shutdown

04-06-2011, 01:18 PM
A guide to government on the brink
Many federal workers would stay on the job despite spending impasse

By Tom Curry
National affairs writer

Hour by hour, Congress and President Obama seem to edge ever closer to a partial shutdown of federal government operations.
As of Wednesday morning, there was no accord between Obama and congressional Republican leaders on a plan to curb federal spending for the rest of the fiscal year, which ends on Sept. 30.
Here's a guide to squabble and the impending shutdown, and you can submit your own questions at the end of this story:
What would cause a shutdown of federal agencies?
If Congress fails to enact a spending bill before Friday, federal agencies would begin to restrict operations and furlough non-essential workers. It would be the first such shutdown since 1996.
House Republicans passed $61 billion in spending cuts on Feb. 19. But their bill was rejected by the Democratic-majority Senate two weeks later.
Matters came to this point because last year Congress failed to enact the regular appropriations bills that would have authorized agencies and departments to spend money in fiscal year 2011, which began on Oct. 1, 2010.
Lacking the regular appropriations bills, Congress has passed a series of interim bills — called continuing resolutions or CR's — which essentially continued departments’ and agencies’ funding at the same levels as in fiscal year 2010. The most recent CR expires Friday.

Why would a government shutdown be only partial and not complete?
According to the Office of Management and Budget (OMB) memo which regulates shutdowns, the federal employees kept on the job during a shutdown include those who “are engaged in military, law enforcement, or direct provision of health care activities” and those who are necessary “to protect life and property.”
Video: Budget talks fail, shutdown looms (on this page)
According to a 1981 OMB memo, the category of protecting life and property would include federal workers in charge of “safe use of food and drugs and safe use of hazardous materials” and many other job categories such as border patrol officers, air traffic controllers, and those in charge of care of federal prisoners.
Barry Anderson, who served as assistant OMB director for budget matters during the last government shutdown in 1995 and 1996, said, for example, that a national park doesn’t fall into any of the categories named by the OMB memo, but the guards protecting national parks from vandals and thieves would fit under the rubric of “protect life and property” so they’d stay on the job.

Would elderly people on Medicare still have their medical bills paid if there were a government shutdown?
Yes. Let’s take the case of an 80-year old man getting weekly treatments from his doctor. “Clearly the payments to the doctor for this man’s treatment are not affected,” Anderson said.
However he added that the operations of the Centers for Medicare and Medicaid Services (CMS), the agency that runs Medicare, are funded by annual appropriations.
The CMS might have contracted out some of the task of reimbursement of doctors in this fiscal year to private-sector contractors. “If that’s the case, not only will the man get the treatment and not only will there be money for that treatment, but the money will actually be paid,” said Anderson.
Video: Boehner: Won't allow White House to put us in a box (on this page)
However if CMS employees are directly handling reimbursement of the doctor in this man’s case, then payment will likely be slowed down by a government shutdown. “The doctor will get the money, but he won’t get the money promptly. He will only get it after the CMS people are back at work,” Anderson said.
Will the Treasury run out of funds to spend on Friday?
No. Withholding from workers’ paychecks and other tax collections, as well investors’ purchases of Treasury securities, supply the government with a year-round flow of funds. According to the most recent Daily Treasury Statement, the government had an operating cash balance of $55 billion on Monday.
Chart: U.S. budget deficit
But the money can’t be spent without congressional authorization. As Article I of the Constitution says, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law … ”
Is the impasse over a spending plan for this fiscal year related to the upcoming vote on whether to raise the federal debt limit?
Not directly, no. Even if Obama and congressional Republican leaders reach an accord on spending for the rest of fiscal year 2010, the federal government will still reach its borrowing limit in the next several weeks.
The one common factor in both cases is a dispute over how much money the federal government should borrow, collect through taxation, and spend. House Republicans are reluctant to raise the borrowing limit and want to force more spending cuts.
How much money are the Republicans and Democrats in Congress squabbling about?
The starting point for the bargaining was the spending bill the Republican-majority House passed on Feb. 19. Compared to current spending levels, it would cut spending by $61 billion.

The bill cut discretionary spending on agencies such as the Coast Guard, the Environmental Protection Agency, and the National Park Service. Entitlement spending, including Medicare and Social Security, was spared.
Measured as a percentage of all federal spending, how large a spending cut is Congress considering?
A $61 billion cut would be equal to 1.6 percent of total projected federal spending in this fiscal year. It’s equivalent to about five or six days’ worth of federal spending.
One reason it's so difficult for Congress to cut even 1.6 percent of federal spending is that spending almost never declines.
With the exception of 2010, when spending fell due to lower outlays for the Troubled Asset Relief Program and payments to Fannie Mae and Freddie Mac, the last time spending fell was in 1965. Only three of the current members of Congress were serving in 1965.
How far apart are the Republicans and the Democrats?
The amount in dispute is somewhere between the $61 billion that House Republicans tried to cut and the $33 billion which is the amount of spending that Democrats are offering to cut.
But there’s more than splitting the difference on one number that’s the issue in the negotiations. There are “policy riders” attached to the House-passed bill that make it hard to reach an agreement.
House Speaker John Boehner said Tuesday "policy provisions must be part of any final agreement, because the American people are concerned not just about how much we’re spending, but also how we’re spending it."
For example, the bill included a provision that would deny funds for the EPA to enforce restrictions on greenhouse gas emissions from sources such as electric power plants.
House Budget Committee chairman Rep. Paul Ryan offered his plan Tuesday to cut future spending on entitlements such as Medicare. How does a vote on a CR affect the chances of reaching a bipartisan accord on entitlements?
One analyst, former Senate Budget Committee staff director William Hoagland said “Any agreement, even if it is half of $61 billion, if adopted in the next week, might provide some confidence that Congress can work together to address our fiscal outlook.”
But he added, “My bigger concern has been that with so much focus on the non-defense discretionary spending portion of the budget (13 percent of total federal spending) that any agreement here might lead some people to believe they have addressed the budget problem — and of course, nothing could be further from the truth. If it has been this difficult addressing discretionary spending, how much more difficult is it going to be to address major entitlement spending?”
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