Backgrounder: Government shutdown


What it is: If Congress can't pass a bill to fund the government by midnight of Sept. 30, large parts of the federal government will shut down.

The bill in question is a called a continuing resolution, an alternate way of funding government agencies used by Congress when it fails to approve formal appropriations bills. Continuing resolutions typically have agencies continue to fund efforts at the previous year's rate, although they can also be used to enact policy or reduce spending, usually to the chagrin of the White House. Government officials dislike continuing resolutions because starting new projects under them is practically impossible and shutting down old projects slated for cancelation is also difficult, if not impossible.

The Senate will likely approve a modified CR that takes out the ACA amendment and send it back to the House. Republicans there will have to decide whether to accept the CR without defunding the ACA or risk not meeting the Sept. 30 deadline for funding federal agencies.

What stays open:

Agencies that provide entitlements such as social security, Medicare and Medicaid will keep providing those benefits.

The shutdown would also not affect mail delivery or processing since the Postal Service is self-funded and is not part of the appropriations process.

When a government shutdown was threatened in 2011, the Veterans Affairs Department issued a shutdown field guide (.pdf) stating that all hospitals would remain open and fully operational, and pension and disability payments would continue to be processed.
When the government actually did shut down in 1995 and 1996, the Office of Management and Budget determined that agencies that "provide for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property" would continue to operate, meaning that the military won't shut down. The armed forces will continue to work, but will not be paid until the funds are made available. Soldiers will be paid back pay for days worked without pay.
OMB also excepted "essential activities to the extent that they protect life and property." That includes air traffic controllers, border security personnel, and law enforcement. 
Federal workers who stay on the job will not be paid during the shutdown, but will be entitled to back pay once the government is funded again, a Sept. 17 Office of Management and Budget memo (.pdf) on the shutdown says.

The Energy Department works on no-year funding so it will be able to stay open in the event of a shutdown until it runs out of money. With no-year funding, money allotted to an agency isn't tied to a particular fiscal year and can be spent even after the current fiscal year ends. The funds remain available until they are expended.

What will be closed:

Most other agencies will either be shut down completely or working on a limited basis with only essential employees keeping the lights on.

Regulatory agencies would be affected if the CR doesn't pass in time. The Securities and Exchange Commission would almost entirely shut down, a Dec. 2011 SEC memo (.pdf) says.

Agencies would also not be able to renew contracts or grants or extend current contracts or grants, the OMB memo says, unless the contract addresses emergency circumstances.

For those living in Washington, D.C., city services would be affected since Congress controls the District's budget. If the government shuts down, so would trash collection in D.C. Though, Mayor Vincent Gray said a contingency plan would take effect to keep schools, law enforcement and emergency services open, the AP reports.

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