7/27/2019 Federal Government Shutdown - Daily Update Oct 4, 2013
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ManattGovernmentAffairsandPublicPolicyPractice
U.S.FederalGovernmentShutdown:DailyUpdate#3
FridayMorning,October4,2013
TheElevatorSpeechOverviewThe government shutdowncontinues asthe stalemate onCapitolHill showsnosignsof
abating. Lawmakers, media, and the public are becoming increasingly focused on theupcomingdebtceilingdeadline.HouseRepublicanscontinuetopasssmallCRsdesignedfor
publicrelations,Democratscontinuetotrytoofferalternativestheyknowwillberuledout
oforder,theSenateandPresidentcontinuetoasktheHousetopassaCleanCRtofundthegovernmentandgetbacktowork.EverybodyexpectsCongresstoremaininsession
andunproductivethroughtheweekend.
U.S.HouseofRepresentatives
On partisan votes, the House of Representatives passed two more targeted continuing
resolutions(CRs)onThursdaythatwouldauthorizesomefundsforcertainpaymentstoNational Guardmembers and reservists aswell as provide funding for veteran benefit
compensation,pensionandeducationassistance.TheHousehasnowpassedatotaloffivetargeted CRs and sent them to the Senate. With the consideration of each bill, House
Democratshaveattemptedtooffera CleanCRastheiralternativeproposal. Aperverseparliamentary game then ensues that is very similar to playing tic-tac-toe, with the
outcome being predetermined every time so long as the order of moves is correctly
followed. Under the Rules of the House, Democrats may only offer one motion duringconsideration of these bills. Each time House Democrats attempt to offer a clean CR
Republicans in turnmake amotion that the amendment isout oforderunderRule16,which says the entire amendmentmust be germane to the underlying bill. Because the
Democratic proposal funds the entire government not just the small portion the
Republicansdesire,arulingbytheChairismadethatitis,indeed,outoforder.DemocratsaskthattheHousevoteontheruling.Republicansthenmovetotablethevoteontheruling
andavoteisheldonthemotiontotable.Toabsolutelynobodyssurprise,therequestto
voteontherulingoftheRepublicanChairmanistabledbyonapartylinevote.Gameover(untiltheydoitagainanhourlater).
In other developments in the House, a group of New Democrats (fiscally-conservative,
centristdemocrats) in the Housepubliclyannounced theirsupport for aCRthatwould
includeaprovisiontorepealtheAffordableCareActsmedicaldevicetax,anACAprovisionwhichhaswideandbipartisanopposition.InalettertoHouseSpeakerJohnBoehner(R-
OH)andHouseMinorityLeaderNancyPelosi(D-CA),thebipartisangroupofsignatoriessuggested offsetting the tax revenueby extending a pensionstabilization provision that
waspartofatransportationauthorizationbillpreviouslypassedbytheSenate.Democratic
leadershipintheHouseandSenatehasexpressedoppositiontotheproposal.
Lawmakers are becoming more vocal about their concern for furloughed workers,
particularlymemberswithahighconcentrationof federalemployeesin theirdistrict.On
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Wednesday, A bipartisan group of 41 members in the House circulated a letter to
colleaguesseekingsupportforabill(introducedSeptember30)thatwouldguaranteethatfurloughedworkers received their pay retroactively. The bill, sponsored byRep. James
Moran(D-VA)has66Democraticcosponsorsand5Republicancosponsors.Ithasnotcome
totheflooryet.
TheHouseisexpectedtobeinsessionthroughSaturdayandconsideringaSundaysessionaswell.
U.S.SenateSenate Democrats remain opposed to the targeted CRs that have passed in the House,
maintainingthattheGOPshouldnotbeabletopickandchoosetheirfavoredportionsofgovernmenttokeepopenwhileleavingotherportionsclosed. SenateDemocratsandthe
President observe that under the GOP approach, they will open National Parks while
keepingtheEnvironmentalProtectionAgencythatenforcestheCleanAirandCleanWater
Actsclosed;theywouldopentheNationalInstitutesofHealthyetkeeptheDepartmentofHealth and HumanServices that provides flu shots closed; theywouldprovideVeteran
benefitpayments,butcontinuetohaltconstructionorrepairofVeterancarefacilities,etc.Accordingly,theSenatehasnottakenupanyofthetargetedCRspassedbytheHouse.
DebtCeiling
Membersonbothsidesoftheaislehavenowturnedgreaterattentiontothedebtceilingas
awaytoforcenegotiationandreachadealthatwouldbothreopenthegovernmentandpreventdefault.ThesemembersincludeSenateMajorityWhipRichardDurbin(D-IL)and
HouseBudgetChairmanPaulRyan(R-WI).ChairmanRyan,whobelievesthecombinationof the debt ceiling and CR is inevitable has been consulting with other Republicans,
includingleadership,tocraftalistofdesiredpolicyconcessionsfornegotiationsoverthe
debt limit increase. Issues thatmay be onthe tableas sweeteners include changes toentitlementprograms,arollbackofsequestrationcuts,andmovementontheKeystoneXL
pipeline.ThediscussionatWednesdaynightsWhiteHousemeetingalsobrieflyconsidered
asimilarcourseofactionbuttheconversationwasineffectual.
In a report released Thursday, the Treasury Department is raising awareness of thepotential impact of default and cautions against the potentially significant economic
damage that could result from the political brinksmanship over the debt ceiling.As the
worldsreservecurrency,reverberationsfromadefaultbytheU.S.federalgovernmentanunprecedented event would be felt around the world with the exact magnitude
unknowable.
Ofprobablythemostsignificanceofalleventsthroughouttheday,SpeakerJohnBoehner
(R-OH)privatelytoldagroupofHouseRepublicanshewillnotallowagovernmentdefaulttooccurandindicatedawillingnesstobringameasurepreventingdefaulttothefloor,even
ifhehadtodoitwithoutsupportfromthemajorityofhiscaucus.Suchanactioncould
threatenhisSpeakership,ashehasalreadyhadtopassthreesignificantmeasuresthisyear
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with only aminority of Republican support: the fiscal cliff deal (the last time the debt
ceiling needed to be raised), the Hurricane Sandy relief bill, and the Violence AgainstWomenAct.SpeakerBoehnersspokesmanrespondedtothereportsacknowledgingthat
theSpeakeriswellawarethatadefaultwouldbedisastrousforoureconomy[butthat]a
cleandebthikecannotpasstheHouse.HerepeatedtheirstancethatPresidentObamaandtheDemocratsmustenterthediscussionpreparedtonegotiate.Theinitialreportsof
SpeakerBoehnersprivatecommentshadaslightcalmingeffectonthemarkets.
MarketReactiontotheShutdownandThreatofDefault
Standard&PoorsRatingsServices(S&P)isestimatingthattheshutdownwillshaveabout0.3%fromthegrowthofrealGDPintheU.S.foreveryweekthestandoffcontinues.S&P
predictsitcoulddiminishfourthquarterGDPbyaround1.2%ifitlastsaslongasthe1996shutdown(21days).TheS&PsDeputyChiefEconomistpredictsthatcombinedwiththe
impending debt ceiling, the shutdown could significantly hurt business and consumer
sentiment,aswellastheeconomywhichisnotasstrongasin96.iOnThursdaywhenthe
stockmarketsclosed,theDowJonesindustrialaverage,theS&P500index,andtheNasdaqComposite Index were all down 136.66 (.90%), 15.21 (.90%), and 40.68 (1.07%)
respectively.MeasuresofinvestoranxietyarealsoattheirhighestpointsinceJune.
CapitolHillGoesonLockdown
CapitolHillwenton lockdownatapproximately2:20PMThursdayafternoonwhenshots
werereportedoutsideoftheHartSenateOfficeBuilding(neartheintersectionof2ndStreet
NEandConstitutionAve).TheShelterinPlaceorderwasliftedshortlyafter3:00PMafterthe suspectwas apprehendedaftera car chase. The incidentbeganwhenawoman ina
vehiclestruckaprotectivebarrier.U.S.CapitolPolicethenfiredshotsinanefforttostopthecarandwereeventuallysuccessfulneartheCapitolcomplex.OneCapitolPoliceofficer
was injured but is in stable condition. The driver was killed in the incident and the
conditionofachildinthecarisunknown.Thewomansmotiveisunknown,however,thereisnoevidencethattheincidentwasterrorist-related.
TodaysAgencySpotlight:DepartmentofTransportation
TheDepartmentofTransportation(DOT)ispartiallyshutdownwithapproximatelyone-
third of its overall workforce furloughed. The furloughs are not distributed across theagency evenly, with approximately 33% of the Federal Aviation Administration (FAA),
more than 50% of the Federal Railroad Administration (FRA), and nearly 95% of the
Federal Transit Administration (FTA) furloughed; some of the FAAs Office of AviationSafetypersonnel,however,willberecalledtoworkincrementallyoveratwo-weekperiod.
ActivitiesthatwillcontinuetooperateattheFAAincludeairtrafficcontrolservices,airportinspections, hazardous materials safety inspections, and on-call accident investigations.
The FRA will continue the continuous inspector presence on railroadproperty as their
absenceisconsideredasafetyhazard.TheFTAwillcontinuelimitedfunctionsfundedfromprioryearappropriations,includingsomeHurricaneSandyrelatedactivities.
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SuspendedactivitiesincludetheNationalHighwayTrafficSafetyAdministrations(NHTSA)
defectsinvestigations,vehiclesafetyactivities,andthereviewofincominginformationonpossibledefects. TheFAAhassuspended facilitysecurityinspections,evaluations,audits
and inspections; air traffic performance analysis; the development of NextGen safety
standards; routine personnel security background investigations; and law enforcementassistancesupport.AttheFRA,suspendedactivitiesincludegrantandfinancialassistance
activitiesaswellastheirintake,processing,andevaluationofgrantapplications.TheFTAwill not execute any grants, contracts, purchase orders or other documents obligating
fundsorreimbursetransitagenciesforongoingoperations.Octoberisnormallyamonthin
whichgrantees request significant reimbursements so the impactwill be felt keenly bysmallagencieswithoutalotofcashonhand.Forongoingprojects,theFTAstaffwillcease
environmental,legal,civilrightsandotherreviewsessentialforadvancingprojectstothepoint of obligation. For more information on specific activities, please see the DOTs
Contingency Staffing Plan:
http://www.dot.gov/sites/dot.dev/files/docs/DOT%202014%20Plan%20for%20Approp
%20Lapse.pdf.
PublicOpinion
Wecontinuetowatchformeaningfulpublicopinionpolling.
RecommendedReading
WashingtonPost:JohnBoehner,betweenarockandahardplaceonshutdownanddebt
limithttp://www.washingtonpost.com/politics/john-boehner-between-a-rock-and-a-hard-place-on-shutdown-and-debt-limit/2013/10/02/32a27f1a-2b9f-11e3-8ade-
a1f23cda135e_story.html?tid=pm_pop CNN:GovernmentShutdown:Whatweknowanddontknow
http://www.cnn.com/2013/10/02/politics/government-shutdown-knowns-
unknowns/index.html?iid=article_sidebarPOLITICO:GovernmentShutdown:Isagrandbargaintheonlywayout?
http://www.politico.com/story/2013/10/government-shutdown-debt-ceiling-grand-
bargain-congress-97757.html?ml=po_rNewYorkTimes:RepublicansSayBoehnerVowstoAvertFederalDefault
http://www.nytimes.com/2013/10/04/us/politics/debt-limit-impasse.html?_r=0TheEconomist:Whydoesthedebtceilingmatter?
http://www.economist.com/blogs/economist-explains/2013/10/economist-explains-0
LosAngelesTimes:Op-edDontwaitonthedebtlimithttp://www.latimes.com/opinion/commentary/la-oe-strain-debt-ceiling-
20131003,0,5729329.story
Formoreinformationorforspecialinquiries,pleasecontactManattsFederalGovernment
AffairsGroup.
JamesBonham,Chair
7/27/2019 Federal Government Shutdown - Daily Update Oct 4, 2013
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FederalGovernmentAffairsandPublicPolicyPractice
Manatt,Phelps&Phillips,LLP
70012thStreet,NW,Suite1100Washington,DC20005-4075
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