Progress and Preparations in Federal Government Shutdown Battle

Washington readies for stoppage even as progress is made to avert a crisis.

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Even as Congressional leaders have bought a little bit more time to avert a federal government shutdown, Washington continues to prepare for such a crisis. With government funding set to expire within a week, Congress has yet to pass a bill that would keep the doors open. While Republicans and Democrats have made some progress toward avoiding a shutdown this week, they do not appear to be close to an overall resolution to the thorny fiscal impasse.

Because Congress never passed a full budget for 2011, current funding of the government will expire on March 4. Early in the morning on February 19, the Republican-controlled House of Representatives passed a bill which would fund the government until the fiscal year ends, but it also included $61 billion in cuts. Since Congress was out on recess last week, there is little time left to negotiate a full-year compromise.

[See a slide show of 10 effects of a federal government shutdown.]

The two sides may have finally found a way to move forward on a temporary bill to extend the deadline, but only for two weeks. On Friday, Congressional Republicans unveiled a bill which would keep the government funded until March 18, but would cut about $4 billion from current spending levels. But rather than target cherished Democratic programs, the bill makes cuts which were also proposed in President Obama's fiscal year 2011 budget request, as well as some earmarks which had been extended from 2010. President Obama has already committed to banning earmarks from future spending bills. Senate Democrats, with some caution, praised the bill for meeting them halfway. "The plan Republicans are floating today sounds like a modified version of what Democrats were talking about," said Jon Summers, a spokesman for Senate Majority Leader Harry Reid, in a released statement Friday. House Minority Leader Nancy Pelosi wasn't as enthusiastic, blasting some of the cuts to education spending. The cuts, which include literacy programs, were originally recommended by Obama in his 2011 budget request, but only as part of an overall restructuring of federal school programs which would have directed the savings to other efforts. "This is not a good place to start," Pelosi said in a statement released over the weekend. [See a round-up of editorial cartoons on the budget and the deficit.]

The House is scheduled to take up the measure on Tuesday. If it passes, it will buy time to come up with a compromise to either extend the deadline further or fund the government through the remainder of the fiscal year. But there are only so many painless cuts to make, and a tougher impasse over the direction of federal spending still looms on the horizon. Speaking with reporters on Monday, House Majority Leader Eric Cantor said that he thought that the parties could keep the government working while cutting spending. "None of us are here to bring about pain for pain's sake," Cantor said. But he also criticized the Senate for failing to act on the House's version of the bill, or to offer its own version yet.

[See a slide show of 10 budget and spending fights looming for Obama and the GOP.]

Meanwhile, agencies have quietly begun laying the groundwork for a government shutdown, which would require all "nonessential" employees to be furloughed without pay. Essential employees, defined as those necessary to protect life, property, or national security, as well as presidential appointees and members of Congress, will still show up for work, although in some cases they may not be paid. The Social Security Administration has met with the unions that represent its employees to discuss possible furloughs or layoffs. Officials with the Office of Management and Budget say that each agency has contingency plans for a shutdown. Federal contractors, who make up much more of the government's activities than they did in the last government shutdown 15 years ago, are also on notice that federal money will dry up.

"It can foul up things," says Barry Anderson, who was an Office of Management and Budget official during the 1995 government shutdown. For government employees, for example, a shutdown can mean weeks of uncertainty about when or if the next paycheck will come. For the general public, it could mean long delays in processing applications for Social Security benefits or student loans. And for politicians, it means wading into very unpredictable and therefore dangerous waters as voters react.