Showdown over the Shutdown Begins

After months of uncertainty regarding the continuation of federal agency funding into the new fiscal year, the anticipated government shutdown has officially begun. On Tuesday, the Senate rejected both a House-passed Continuing Resolution (CR) that would have kept the government operational through November 21, and an alternative proposal from Senate Democrats. As a result, the government was forced to shut down when funding for the current fiscal year expired at midnight.

Congressional Democrats are advocating for legislative changes, such as extending health care subsidies under the Affordable Care Act, as a condition for their support of ongoing government funding, while Congressional Republicans and President Trump are pushing for a “clean” CR that does not include policy changes or address healthcare subsidies.  At the time of writing, leaders in Congress and the White House have not reached an agreement to resolve this impasse.

The White House Office of Management and Budget (OMB) issued a memo to federal agencies instructing them to identify programs, projects, and activities that would lose discretionary funding on October 1, with no alternative funding sources available. For these areas, OMB directed agencies to begin developing reduction in force plans that go beyond standard furloughs, permanently eliminating jobs in programs not aligned with the President’s priorities.

Key federal agencies, including the Department of Labor, Department of Education, and Department of Agriculture, have published their own operational plans for the shutdown. These plans broadly curtail non-essential services and activities, such as technical assistance for grant recipients. Additionally, certain federal contracts, including AbilityOne contracts, are expected to be affected.

Veterans’ benefits, Social Security payments, and Medicare and Medicaid payments are expected to proceed as usual. Meanwhile, programs like the Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants and Children (WIC) program have limited contingency funds available to sustain operations for the time being.