What to Know in Shut-Down Washington: Staff & Pay Down, Pain Up

Congress expects to shut down the government down after tomorrow night’s deadline despite ongoing House and Senate work on separate stopgap funding measures.

House Republicans released revised text early this morning of a GOP leadership-backed stopgap bill — now called the “Spending Reduction and Border Security Act” — that would fund the government for a month while making cuts to some non-defense domestic spending programs, Lauren Dezenski reports.

Democrats haven’t agreed to the measure, and it’s not yet clear that Republicans will have enough votes to pass it through the House today. There’s no chance the Senate will pass the bill ahead of the shutdown deadline, and it’s considering a stopgap that would run longer and provide more funding, including aid to Ukraine.

GOP leaders desperate to move a short-term CR decided the best way to sell it is by another name.

The term “continuing resolution” is an anathema to far-right Republicans who say Washington needs to break its cycle of delaying a spending debate until the last minute and then pass an omnibus package hammered out by leadership. Speaker Kevin McCarthy (R-Calif.) and his allies argue that the naysayers can still vote for their plan, since it isn’t technically a CR and would dramatically slash funding and include conservative border priorities.

The renaming ran into opposition from Republican holdouts who say they’re against a stopgap, whatever it’s called.

“A continuing resolution needs to be eulogized, not rebranded,” said Rep. Matt Gaetz (R-Fla.), an opponent of CRs and the speaker. Maeve Sheehey covers the sales pitch.

As the shutdown deadline approaches with neither the House nor Senate passing the 12 appropriations bills needed to keep the federal government running, most government operations will shut down this weekend, causing employees to be furloughed and curtailing many federal services. The almost-certain shutdown will have cascading effects and accumulating costs.

Read below for BGOV’s quick guide on what to expect:

On Capitol Hill

Photographer: Al Drago/Bloomberg

Rep. Matt Gaetz (R-Fla.) speaks during a hearing in Washington on July 26.

FAR-RIGHT REPUBLICANS threatening to remove McCarthy appear more likely to succeed in gaining leverage in spending talks than in ousting the Republican leader. Dissident Republicans have repeatedly warned they may try to oust McCarthy (R-Calif.) if he doesn’t push for deep cuts.

Still, skeptics are questioning whether the threat of a “motion to vacate” is more of a bluff than anything. “The reason it’s very rarely done is that if you take a shot at the king, you better kill him,” John Feehery, a strategist who worked for Speaker Dennis Hastert (R) for several years, said. Read more.

• Some of the far-right dissidents threatening a government shutdown in two days represent districts full of federal workers who’d face furloughs and paycheck delays.

SEVEN LAWMAKERS will be key to navigating the House’s complicated and deeply-fractured dyamics. Billy House and Erik Wasson run down the list and explain their unique roles.

CONGRESSIONAL STAFFERS are waiting to see if they’ll get an “essential” designation in a shutdown—which would force them to remain at the Capitol without pay for high-stakes negotiations and questions from constituents about possible delays in federal services. Jon Meltzer, Maeve Sheehey, and Greg Giroux mapped the distribution of workers by congressional district. Out of the 100 House members with the most civilian federal workers in their districts, more than half are Republicans. Read more and view the interactive map.

National Security

Photographer: Eric Thayer/Bloomberg

Migrants surrender to US Border Patrol agents at the US-Mexico border in Yuma, Arizona on May 11.

BORDER OPERATIONS would be snarled by a shutdown as the Department of Homeland Security deals with an increase in migrant arrivals. “It’s a tough situation at the border that gets even tougher if we shut down,” said Sen. Chris Murphy (D-Conn.). Read more.

• A shutdown threatens to exacerbate an already-tense debate over housing thousands of migrants on federal parkland in New York City.
• Lawmakers already let one Homeland program lapse: standards to keep dangerous chemicals out of terrorists’ hands. The department’s authority to combat threatening drones and root out weapons of mass destruction are also due to expire this year.

TROOPS would have to report to duty without pay during a shutdown unless lawmakers pass a bill to keep compensating them, as they did ahead of the shutdown 10 years ago. There are about 2.1 million service members that would face working without pay. Read more.

• US European Command, which oversees training and has daily contact with Ukrainian forces, “will be out of operating funds” come Monday, said Mike McCord, the Pentagon’s comptroller.

FEDERAL CONTRACTORS would largely face a work stoppage during a shutdown. Agencies generally can’t incur new obligations for contracted work under a continuing resolution or during a shutdown. It would also shorten the fiscal 2024 procurement window. Read more.

• Federal contractors ranging from SpaceX to janitorial services are bracing for up to $1.9 billion a day in lost and delayed revenue as funds lapse Oct. 1. While federal workers will get their missed salary once a shutdown ends, contractors often don’t.

CYBERSECURITY REGULATORS may furlough nearly 82% of their workforce if Congress fails to avoid a shutdown, according to a plan for the Cybersecurity and Infrastructure Security Agency, which helps to monitor critical infrastructure systems like gas pipelines. Read more.

Economic Policy

Photographer: Andrew Harrer/Bloomberg

Gary Gensler, chair of the Securities and Exchange Commission, during an interview in Washington on July 27.

ANTITRUST REGULATORS have funds to continue operations for three weeks if the government fails to avert a shutdown, but the Federal Trade Commission said it would need to furlough employees and ask to pause litigation if the stalemate continues longer. Read more.

WALL STREET’S REGULATOR would be hamstrung during a shutdown right as SEC Chair Gary Gensler is gaining momentum on the Biden administration’s ESG agenda, with work on climate disclosure mandates and rules targeting greenwashing in the pipeline. Read more.

• Up to 93% of the SEC’s 4,600 workers would be furloughed in the event of a shutdown, Gensler said. The agency’s ability to review initial offering documents would also be curtailed, effectively bringing new listings to a halt during a shutdown, he said.
• Without critical figures like the Labor Department’s monthly employment report and a key inflation gauge from the Commerce Department, data from private-sector sources will take the spotlight.

THE IRS WILL STOP SOME OPERATIONS and furlough some employees if there’s a shutdown, a shift from the contingency plan from last year. About a third of employees will continue to work and will be paid using the funds from the Inflation Reduction Act passed last year. Read more.

• The disruption would create further setbacks for taxpayers trying to resolve what they owe and limiting companies waiting for regulations.

Other Agencies

Photographer: Taylor Glascock/Bloomberg

Pete Buttigieg, transportation secretary, speaks during a news conference in Chicago, Illinois, on Sept. 1.

DRUG PRICING TALKS would be complicated by a shutdown, just as drugmakers are supposed to start submitting data for pricing negotiations with Medicare—a signature priority of the Biden administration—and as some states push people off their Medicaid rolls. Read more.

AVIATION REGULATORS would furlough 38% of their workforce and halt a slew of work, including the development of new technologies and rulemakings. The aviation industry warned of lapses in security inspections and trainings for new air traffic controllers. Read more.

• Meanwhile, airport security officers are bracing for a shutdown that would strain the workforce and risk major delays for travelers. Around 50,000 officers will have to work without pay even as the TSA has been screening an average of 2.5 million people daily in recent months.
• Transportation Secretary Pete Buttigieg warned the FAA wouldn’t be able to collect revenue if Congress lets its authority lapse this weekend.
• The busiest air travel day of the year is expected to come just a few days after a potential government shutdown.

WHITE HOUSE STAFF were told they’ll be divided into three categories: exempt, excepted and furloughed. All exempt and excepted workers were told they should report to work on Monday Oct. 2. Read more.

FEDERAL FIREFIGHTERS face steep pay cuts this fall as a 2021 salary boost expires Sept. 30 and Congress scrambles to prevent a mass exodus from the rank-and-file. The Forest Service has about $30 million left in the pot of money from the bipartisan infrastructure law. Read more.

• America’s national parks would face closures after a protracted shutdown that would also upend the nation’s annual $800 billion outdoor recreation economy and harm small businesses, in perhaps one of the most visible impacts of congressional inaction.
• Overburdened communities would suffer the most if and when a shutdown halts EPA services, the agency’s head told congressional lawmakers on Wednesday.

FEDERAL COURTS could operate for at least two weeks if Congress fails to fund the government, the judiciary’s administrative arm said. Some deadlines may be rescheduled if a federal agency lawyer isn’t working during the shutdown, one official said. Read more.

• Prosecutors overseeing investigations of Donald Trump, President Joe Biden and Hunter Biden will keep working—and continue to get paid—in the event of a shutdown.

LABOR LAW ENFORCEMENT is set to be significantly reduced if Congress can’t meet its rapidly approaching deadline to approve funding. Read more.

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Giuseppe Macri in Washington at gmacri@bgov.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com