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Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

Government Teeters on Verge of Shutdown as House Adjusts Obamacare Defunding Strategy

September 29, 2013 | Federal Budget | Comments
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Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH)

Backing down from demands by the chamber’s most conservative members that any continuing budget resolution be tied to defunding the 2010 health reform law, House Republican leaders this week said they would seek instead to link the defunding measure to an upcoming debate over raising the national debt ceiling.

The decision came as the Senate proceeded with debate on a House-passed measure to carry the federal government through the first weeks of the new fiscal year while simultaneously withdrawing funding for certain programs under the Affordable Care Act. The Senate appears likely to strip out the defunding proposal and send a clean measure back to the House this weekend. It is unclear at this time whether the House will approve the Senate version as-is or attempt to add various “policy riders” expressing conservative priorities that are also supported by some Democrats in the Senate. With the federal fiscal year ending at midnight on Monday, any additional back-and-forth between the two chambers will bring the government to the brink of – or over – the edge of the shutdown deadline.

In the event of a government shutdown, services by “nonessential” government personnel would halt, but many programs would continue operating. For example, because Medicaid is a mandatory spending program that is not subject to annual appropriations, Medicaid payments to states would not be affected. Even if an agreement is reached before the fiscal year ends, the continuing resolution would only put off decisions about the 2014 budget for 45 days, setting up the Congress for another budget debate later this fall.

Meanwhile, the House leadership has begun regrouping for a debt ceiling showdown that will occur by mid-October. The Treasury has stated that the federal government will run out of borrowing authority on October 17. Without an increase in the debt ceiling, the government will be forced to default on some of its obligations. Reports indicate that the House leadership is considering today what concessions to demand as part of its negotiating strategy on the debt ceiling increase. Proposals have ranged from repealing the health law’s medical device tax to enacting reforms to Medicare and Medicaid. The House will likely vote on its version of the debt ceiling increase by the end of the week, creating political cover for a possible vote to approve the Senate-passed version of the stopgap budget bill early next week.