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Government Shutdown in Effect. What Now?

Shortly after midnight this morning, the White House ordered federal government agencies to begin shutting down, furloughing thousands of workers and curtailing some services for the first time in nearly 18 years. Meanwhile, President Obama’s health care law went into effect today.

In a last effort for congressional agreement at approximately 1am today, House Republicans voted to reaffirm Obamacare amendments they attached to a spending bill that would have kept the government running (and that the Senate had earlier rejected). The House also requested that the Senate convene a conference committee to work out their differences over the funding plan. However, Senate Majority Leader Harry Reid rejected that proposal. Additional House amendments would have delayed the Obamacare individual mandate and eliminated health insurance premium subsidies for members of Congress, their staffs and the president.

What's next? The Senate then halted business until later today, while the House took steps to open talks. But Reid dismissed the House proposal to begin conference committee negotiation. He also demanded that the House accept the Senate’s six-week stopgap spending bill, which has no policy prescriptions, before negotiations begin. It is expected Congress will continue budget talks today (at least privately, in caucus), while also focusing on the debt ceiling which expires later this month.

Unlike 2011, there have been no suggested discussions about the federal government bond rating being reduced, or not being able to fund interest payments on government debt, according to comments on Bloomberg this morning by David Stockman, former director of the OMB; of course, these scenarios have not yet matured.

 

Timothy Speiss is the Partner-in-Charge of EisnerAmper's Personal Wealth Advisors Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.

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