Federal Government Shutdown Continues

As the federal government enters the second week of a shutdown, there has been no progress to end the stalemate between Democrats and Republicans, and it appears more and more likely a resolution of the shutdown and the necessary increase of the nation’s borrowing authority will converge on October 17.

While President Barack Obama and Senate Democrats insist they will not negotiate on a continuing resolution (CR) or the debt ceiling increase, several fiscal policy issues have emerged from discussions among House Republicans as possible components of a broad budget agreement: repeal of the 2.3 percent medical device tax included in the Affordable Care Act (ACA) (P.L. 111-148, P.L. 111-152); entitlement program reform (particularly cuts to Medicare and Social Security); approval of the Keystone XL pipeline; and a commitment to tax reform. Democrats continue to push for passage of a clean FY 2014 CR (H. J. Res. 59) and debt ceiling increase before turning to broader fiscal discussions.

Meanwhile, a report issued by the Treasury Department on Thursday, October 3, notes that continued political brinkmanship over the debt ceiling could force the economy into a fiscal crisis similar to the 2008 recession.

Back pay for Furloughed Federal Workers Likely

On Saturday, October 5, the House unanimously approved the Federal Employee Retroactive Pay Fairness Act (H.R. 3223) to ensure federal employees furloughed by the shutdown will be paid for that time. The President signaled his support of the measure and Senate Majority Leader Harry Reid (D-NV) may bring up the measure early this week under unanimous consent.

Defense Department Civilian Employees Return to Work

After further consultation with the Department of Justice, the Department of Defense (DOD) concluded that the recently enacted Pay Our Military Act (H.R. 3210) also covers a significant number of DOD civilian employees and they will return to work this week.

House Continues to Move “Mini” Continuing Resolutions

Despite a Presidential veto threat and certain inaction by the Senate, the House continued through the weekend to approve piecemeal resolutions to fund a variety of federal agencies:

  • Park Service, Smithsonian, National Gallery of Art, United States Holocaust Museum (H. J. Res. 70);
  • District of Columbia local revenue (H. J. Res. 71);
  • Department of Veterans Affairs (H. J. Res. 72);
  • National Institutes of Health (H. J. Res. 73);
  • Women, Infants and Children program (H. J. Res. 75);
  • Federal Emergency Management Agency (H. J. Res. 85); and
  • National Guard and Reserves (H.R. 3230).

Other piecemeal measures that may come up for votes this week in the House: