What a federal government shutdown actually means

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What a federal government shutdown actually means

By Tara Golshan and Dylan Matthews Updated Apr 27, 2017, 9:30am EDT

Congress is barreling toward a government shutdown deadline.

The House and Senate have until midnight on April 28 to pass a spending bill or the federal government will run out of money and close its doors.

Despite controlling every lever of government, Republicans are somehow faced with the possibility that they can’t get the votes together to keep the government open. Added to that, the shutdown deadline happens to coincide with President Donald Trump’s 100-day mark, when journalists and historians assess what the White House has accomplished thus far.

Needless to say, a shutdown would be a very bad look.

For now, parties on the Hill are hasty to assure reporters that a shutdown is looking unlikely. Rep. Rodney Frelinghuysen (R-NJ), who chairs the House Appropriations Committee, made a move to avert a government shutdown late Wednesday night, introducing a continuing resolution to provide one week of stop-gap funding, effectively extending the shutdown deadline to May 5, to buy Congress more time to negotiate a spending bill. The House and Senate have to pass the resolution before the spending deadline to keep the government open.

House Speaker Paul Ryan told his conference it was his top priority to avoid a shutdown before everyone came back from recess. “A shutdown is not on the table,” a GOP aide close to the Appropriations Committee said. Another GOP congressional aide put the odds of government shutdown somewhere between 5 and 15 percent. But many areas of funding are still being negotiated across the 11 different appropriations bills, a Democratic aide said.

If they can’t get a funding bill together by this Friday — or May 5, the possible new extended deadline — they’re facing a shutdown, potentially delaying key services and costing the government lots of money.

What a government “shutdown” looks like

Attorney General Benjamin Civiletti, who laid out what modern government shutdowns look like, with Jimmy Carter in 1979. Walter Bennett/The LIFE Picture Collection/Getty Images
So if Congress can’t get it together to pass some kind of appropriations bill, then what happens? The government shuts down, and lots of “nonessential” government activities suddenly cease.

It’s not unusual for Congress to go to the brink of shutdown; it happened as recently as this past December, when Democrats threatened a shutdown if Republicans didn’t pass the Miners Protection Act, which would have guarded former miners’ health care and benefits. But it’s rare they actually don’t make the deadline.

The government has officially shut down 18 times since the modern process that Congress uses to pass budget and spending bills took effect in 1976. The first six of those didn't actually affect the functioning of government at all. It wasn't until a set of opinions issued by Attorney General Benjamin Civiletti in 1980 and ’81 that the government started treating "spending gaps" — periods when Congress has failed to allocate funds for the ongoing functions of government — as necessitating the full or partial shutdown of government agencies.

But from the Reagan years onward, any period in which Congress failed to pass funding measures has meant that major chunks of the government stop operating. Which parts depends from shutdown to shutdown, but it generally excludes essential services without which the economy would grind to a halt and people would die.

During shutdowns, federal employees are divided into “essential” and “nonessential” groups (the name was changed to “excepted” and “non-excepted” in 1995 to avoid hurting people’s feelings). Nonessential personnel receive furloughs: They're off work until the shutdown is resolved and stop receiving paychecks. In the October 2013 shutdown, about 850,000 federal workers received furloughs, or about 40 percent of all federal nonmilitary employees. After shutdowns, furloughed workers almost always receive retroactive payments covering their salaries during the shutdown. Essential workers also see their pay withheld — but they have to work anyway.

The military, air traffic control, federal prisons, and Social Security and other benefit payments generally keep functioning as normal during shutdowns. But many other government functions are curtailed. In the 2013 shutdown, the effects of the furloughs and other shutdowns in government activity included:

• Tax refunds totaling almost $4 billion were delayed.

• The Women, Infants, and Children nutrition program went unfunded.

• Federal research activities at the National Institutes of Health (which lost about three-quarters of its employees), the National Science Foundation (which lost 98 percent of its workforce), and the Centers for Disease Control and Prevention (which lost two-thirds) shut down nearly entirely; the CDC scaled back its monitoring of disease outbreaks.

• Environmental Protection Agency inspections halted at 1,200 locations.

• The Food and Drug Administration delayed approval of drugs and medical devices.

• The national parks shut down, resulting in $500 million in lost consumer spending from tourism.

• Reviews of veterans’ disability applications slowed to a halt, with nearly 20,000 applications per week not being evaluated.

In total, the Office on Management and Budget estimated that the shutdown cut GDP growth in the fourth quarter of 2013 by 0.2 to 0.6 points, and resulted in 120,000 fewer jobs.

So while shutdowns don’t result in seniors going without their retirement checks, or the military closing up shop, or airplanes crashing into each other in the sky, they do cause massive disruption in the lives of hundreds of thousands of workers and their families, and grind a lot of government agencies to a halt.

What are Congress’s options for keeping the government open?

There are some things Congress can do to avoid an embarrassing outcome.

It could 1) pass the appropriations bills, likely in an omnibus, which just crams together 11 appropriations bills into one spending package; 2) pass a “continuing resolution,” or CR, which would fund the government at its current levels, basically buying more time to negotiate the actual appropriations bills (this is what Congress did in December 2016, pushing the deadline to April 28); or 3) pass a “CRomnibus,” which is combination of the two, extending the deadline on certain more contentious appropriations — like for the Department of Homeland Security — in addition to passing a spending bill on the rest.
There seems to be bipartisan support to pass Frelinghuysen’s CR, which also includes funding for former miners’ health care and benefits by continuing funding for the Health Benefits for Miners Act.

But even with a one week extension, and Republicans in control of the House, Senate, and White House, passing this spending bill won’t be easy for the 115th Congress. Unlike President Trump’s Cabinet (and now Supreme Court) nominations, which only needed a simple majority of 51 votes, Republican senators will need 60 votes to end debate on the appropriations bill and get it passed — which means they need to get their party in line plus eight Democrats on their side.

So far, this has looked to mean that Democrats will either get their way on funding or the government will shut down.

The White House is picking a fight more than Congress

Congress is on a tight schedule. It has just a few days with both chambers in session to strike a spending deal — or agree they need more time to strike a deal.

For now, it looks like the government will buy itself some time. And while that’s possibly necessary to avoid shutdown, delaying the shutdown deadline makes the Republican Party’s already full calendar even fuller, distracting lawmakers from tax reform and health care.

As with all bills, the final say is with President Trump. He has to decide whether or not he will sign anything short of his campaign demands. Members of his administration have indicated the White House doesn’t want a shutdown either, but it hasn’t stopped them from making a final push.

The White House seems more interested in a fight than congressional Republicans do. Over recess, the administration took a harder line on the shutdown deadline, saying funding for the wall is a “must,” and Trump tweeted that Obamacare is in “serious trouble.” The president was seemingly hinting at a deal that Office of Management and Budget Director Mick Mulvaney put on the table: an exchange of $1 for the insurance subsidy payments under Obamacare for every $1 given to the border wall. The offer hasn’t swayed Senate Democrats. The White House has asked for supplemental budget to begin construction on the border wall between the US and Mexico. Schumer rejected the deal.

A Democratic aide said Mulvaney told Minority Leader Rep. Nancy Pelosi (D-CA) that the White House could stop funding Obamacare’s subsidies as soon as next month, further escalating tensions over the omnibus bill only days before the April 28 deadline. The White House rolled back its threat within a day.

On Thursday April 27, President Donald Trump aired Congress’s negotiations over Twitter, claiming the Democrats are fighting for Obamacare subsidies for Puerto Rico.

The Democrats want to shut government if we don't bail out Puerto Rico and give billions to their insurance companies for OCare failure. NO!
— Donald J. Trump (@realDonaldTrump) April 27, 2017

On the other hand, the White House seems to have softened its demands for the wall. Most recently, flipping his script, Trump said funding for the wall could wait until September.
Democrats have leverage in the shutdown fight

Many of Trump’s campaign promises are at stake in this fight — and Democrats have made it clear they don’t want to concede on any of them.

If Republicans didn’t need Democrats to pass a bill, they would want to hike up defense spending, grant Trump’s border wall supplemental budget, defund Planned Parenthood (although Speaker Ryan has said that belongs in the health care debate), and cut off subsidies to insurance companies core to Obamacare’s functionality.

But Minority Leader Sen. Chuck Schumer has said none of this is going to happen.
Senate and House Democrats have already warned Republicans that any attempt to pass funding for the border wall or other “poison pills” like defunding Planned Parenthood in the 2017 appropriations bill would be met with unified Democratic resistance — which would result in a shutdown.

This puts Republicans in a difficult spot.

They will either have to make peace with a shutdown or make concessions to Democrats. It looks as though they’re leaning toward the latter, which would result in an omnibus bill that’s pretty friendly to Democrats.

There are some areas of possible agreement, like increases in defense funding and a watered-down compromise on border security, possibly to fund more technology — an area that has more bipartisan support.

It will be near impossible for Republican leadership to sell these concessions to the entirety of its conference — especially once conservatives realize just how much their party has to concede. The irony there is that the more Republican leadership realizes it will lose conservative votes in its own party, the more it will have to rely on Democrats to avoid a shutdown.

Huffington Post’s Matt Fuller put it best: “Conservatives inside and outside Congress may soon rightfully ask: How is this deal any different than a bill Republicans would get if Hillary Clinton were president and Democrats controlled Congress?”

This all comes down to who will put up a fight — likely over funding Obamacare subsidies
According to Rep. Joseph Crowley (D-NY), border wall funding is a nonissue in negotiations: It’s not going to happen. But there are still a number of open items on the table, the biggest of which appears to be funding Obamacare’s subsidies.

As it stands now, it will be a difficult ask for Republicans to give in to Democratic demand to fund cost-sharing reductions — which help make copays and deductibles cheaper for people who have insurance through Obamacare — in the appropriations bill.

“It’s going to be very, very difficult to get Republicans to vote for billions of dollars to fund failing exchanges,” a GOP aide said about the Obamacare subsidies. The aide added that funding Obamacare will likely be more of a sticking point with wider Republican support than funding a border wall. “Not every person campaigned on building a border wall, but every person campaigned on repealing Obamacare.”

Some Republican House leaders seem less willing to go to the mat over Obamacare.
“I don’t think anybody wants to disrupt the markets more than they already are,” Rep. Tom Cole (R-OK), who chairs the Appropriations subcommittee responsible for health spending, told the New York Times. “It’s a very unstable market.”

Two days before the April 28 spending deadline, Speaker Ryan said he would not stand for funding Obamacare subsidies in the appropriations bill. But Senate and House Democrats remain adamant that CSR language needs to be included.

It looks like Congress will have an extra week to come to a compromise. If they don’t, however, they will have a government shutdown on their watch.