Here’s the Lowdown on the Shutdown

written by Steve Berg
September 30, 2013

For 17 consecutive years the White House and Congress have been able to reach agreement on how to manage the budget so that federal agencies can continue to run. (In 11 of those 17 years the White House and at least one chamber of Congress were controlled by different parties.) As of this writing, it looks like that streak is coming to an end, as the federal government prepares for a shutdown at midnight tonight.

If a federal shutdown takes place, the short-term impact on homelessness programs will be minimal. Far more important will be the contents of a final federal budget deal that will likely be the end result of the shutdown and other pieces of the drama that will unfold over the next few months.

Fiscal Year 2014 begins tonight and the prospect of congress actually passing bills to fund federal discretionary spending for FY 2014 appears unlikely. Even though most federal employees will be furloughed immediately, many programs funded by the federal government will continue in operation because they are still using earlier years’ funding or for other reasons:

  • HUD and HHS homelessness programs will continue to operate. These programs, whether operated by state and local government or by nonprofit organizations, are currently still spending FY 2013 money, or in the case of HUD Continuum of Care, FY 2012 money. They are considered emergency/essential programs, so their essential federal staff will be on the job.
  • The Department of Veterans Affairs largely operates on advance funding, i.e. Congress has already passed bills funding FY 2014 operations, so VA homeless programs and indeed the entire VA medical care system will be open for business. There may, however, be delays in processing new applications for VA pensions and disability payments.
  • Public Housing Agencies and their programs will remain in operation, at least for now. PHAs, of course, run the Section 8 Voucher program and Public Housing. FY 2013 funding for those programs will last through December. However, if HUD staff are not allowed to come back to work, reimbursements for PHAs may be delayed. If the shutdown stretches longer, PHAs may need to secure lines of credit.
  • Individual entitlement programs, like Social Security, SSI, Medicaid and SNAPS/food stamps will be unaffected for now.

No federal shutdown in most Americans’ lifetimes has lasted longer than 21 days. After being near-annual events in the Ford, Carter and Reagan Administrations, shutdowns have become rare since January 1996. Back then an intense public reaction to a three-week shutdown helped buoy Bill Clinton’s reelection campaign for President, and probably cost Newt Gingrich his position as Speaker of the House.

So on that basis, any shutdown seems likely to be short. Right now, most of the talk is about a temporary deal, to last through November or December in order to provide more time to work out a final deal. The immediate issue of contention is Obamacare implementation, but attention will soon shift to the federal budget, especially federal spending.

Over the next month, things will get more complicated, since the federal government will hit its legal limit on indebtedness in mid-October. Congress will need to raise the debt limit in order to avoid serious damage to the economy, and may include a large budget deal as part of that agreement.

At the Alliance, we will be working to establish a consistent drumbeat throughout that entire time period – communities are working hard to solve the problem of homelessness, and it is important that the federal government be a good partner, including through healthy funding of key federal programs. The possibilities for a final budget deal vary widely, from undoing recent cuts to programs for poor people, on one hand, to enacting even sharper cuts, on the other.

In the uncertain budget context for this year, it is more important than ever for people who care about homelessness to continue to let federal decision-makers know, and to urge others to do the same thing. The Alliance website, blog, and newsletter include many resources to help you do just that. Please stay tuned for the latest information, and let us know what we can do to make your advocacy efforts more effective.