Grassroots Action Center

September 28, 2023 by NBCC Government Affairs

The federal government is heading toward a partial funding shutdown beginning Oct. 1, and it is unclear how long the shutdown may last if a solution is not reached.

Congress has until Saturday night to pass legislation—known as a continuing resolution (CR)—to avert a lapse in federal government funding. Funding during a CR-like process would generally remain at current budget levels until a final budget bill is passed that would fund the government until October 2024.

The Bottom Line: When it comes to health care, a short shutdown wouldn’t affect major programs like Medicare, Medicaid, and the federal insurance marketplace (Obamacare). Major programs and benefits like Social Security and Medicare are generally unaffected because Congress has approved these programs to spend without an expiration date—what is known as “mandatory spending.” Mandatory spending makes up $7 of every $10 spent by the federal government annually.

Why It Matters: A funding hiatus would still impact federal workers and some programs. Over 2 million people work for the federal government. Roughly 40%–45% of staff at the Department of Health and Human Services could be furloughed. And hundreds of thousands of federal employees would not receive a timely paycheck. Small businesses also can be hurt by a shutdown. The federal government spends billions of dollars on contracts with small companies for a variety of services and materials, and these contracts can be suspended during a shutdown. 

The longer a shutdown persists, the greater the ramifications could be for programs that are part of “discretionary spending” programs. For instance, the effects on health care of a partial shutdown, at least systemwide, are maybe less than in other areas. But there are many programs, such as mental health programs or individual clinics that depend on federal grants for funding, that could be particularly impacted with an extended shutdown. In addition, other health care programs that could be affected include community health centers, pandemic preparedness, food inspections, and initiatives aimed at fighting the opioid epidemic.

What’s Next: If Congress doesn’t intervene soon, Sunday would be the first government shutdown since late December 2018. The partial lapse in funding in 2018 lasted for over 30 days, one of the longest in the last 100 years. The major disagreements on spending revolve around reductions in funding in discretionary spending programs like education, health care (outside of Medicare/Medicaid), emergency disaster relief funds, and transportation. 

If you work for the federal government or as part of a program that receives federal funding, please check with your agency or employer on their operating status if a shutdown occurs. 

NBCC will provide updates on this situation, so stay tuned.

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