To the ever-growing list of tumultuous events besetting the federal government this year, we can now add that old chestnut of the partial government shutdown.
At the stroke of midnight October 1, many federal agencies turned into pumpkins, lacking appropriations for the new fiscal year. The Congressional Budget Office (CBO) estimates that as many as 750,000 federal employees may be furloughed, and the White House is saying that the country could lose $15 billion in GDP each week a shutdown persists.
While many federal workers will get unpaid and unrequested time off, essential workers will need to keep reporting to duty – but without pay, at least until the shutdown ends.
One group of federal employees who do get paid during a shutdown, ironically, are the President and members of Congress themselves (the Constitution requires they be paid regardless of a lapse in federal appropriations.) While a number of lawmakers say they will donate their pay, that is not likely to assuage the many federal employees and contractors who don’t have constitutional paycheck protection.
That’s especially true since those lawmakers and POTUS are the only people in the country who can stop the shutdown by passing and signing appropriations bills or a stopgap continuing resolution (CR).
So who’s to blame for the shutdown? Not surprisingly, the two parties blame each other. Here’s the rundown of what’s happening:
House Republicans approved a seven-week CR last month, keeping government open until the end of October. The CR was “clean,” meaning that it did not include any significant policy riders (other than an increase in security, which both parties generally agree is needed, due to recent incidents of political violence).
In the Senate, Republicans need at least seven Democrats to agree to move forward on a CR to bypass a filibuster. All but three Democrats voted against the House-passed CR, putting forward instead a shorter, four-week CR that also would have extended Obamacare health premium subsidies that expire at the end of 2025 and reversed spending cuts to Medicaid enacted last summer as part of the One Big Beautiful Bill Act. Some Republicans support extending the Obamacare subsidies – albeit with changes in the program – but have insisted that any discussion about that happen separate from the CR.
While the Obamacare subsidies are a big deal for Democrats, there’s also little doubt that their insistence on not passing a “clean” CR also arises from the fact that this is one of the few areas in which they have leverage over Republicans. And while Republicans may be open to extending the subsidies, they don’t want to be seen as giving in to Democrats’ demands. In fact, the Trump administration appears to be using the shutdown as an opportunity make additional reductions in the size of the federal workforce and end programs not to the President’s liking.
The good-ish news is that a small bipartisan coterie of lawmakers is searching for a compromise that could bring the shutdown to a conclusion. But as long as the leadership of both parties – not to mention their loudest and most ardent supporters – remain determined to win the fight, this shutdown could persist for a long time. The last shutdown, in 2028-2019, dragged on for 35 days. There’s no telling how long this will go.
ACRA is developing resources to help CRM firms understand the effects of the shutdown, including some FAQs posted last week. If you are affected by the shutdown please let us know at info@acra-crm.org.
Join ACRA’s Federal Contracting Hot Topic Nov. 12
With new developments in federal contracting happening on what feels like a daily basis (see, for instance, changes to DOT’s Disadvantaged Business Enterprise (DBE) program and revised federal procurement regulations for small businesses), keeping up with the news can be a tall order.
That’s why ACRA is hosting an ACRA Hot Topics session on the current federal contracting landscape on Wednesday, November 12.
The Hot Topics series give CRM practitioners the opportunity to participate in discussions and problem-solving for pressing issues facing the industry. Each session is moderated by a discussion leader to ensure all viewpoints are represented and all who wish to have the chance to have their voice heard.
On Nov. 12, join Nichole Atallah of PilieroMazza, ACRA Chief Lobbyist Andrew Goldberg, and Executive Director Amanda Stratton to discuss the latest on federal contracting.
All employees of ACRA member firms are welcome to join. The ACRA Hot Topics series is only open to ACRA members at this time. There may be opportunities for non-members to participate in future sessions.
Simply sign up here and we will send you a link to join the discussion!