Shut-down 101

OK, we all know Congress keeps threatening to shut down the government but, for a lot of non-dorks, it’s not clear why. I’m using my status as a dork to explain it here. If some of this sounds like I’m describing pre-schoolers it’s because sometimes Congress and the President act like pre-schoolers. That’s probably our fault for voting for them. Bad on us. Anyway, it all comes down to having money for the government to spend. Or rather, giving themselves permission to spend it. They HAVE it. We paid it in taxes. And they borrowed it from China. But Congress can’t agree on how to spend the money.

There are two parts to how the government spends money: the budget and the appropriations process. The budget is a plan for how much the government is allowed to spend in a year. Appropriations are a plan for how the breakdown of spending actually occurs. Sort of like your paycheck is your top-line for household spending and you then break it down into smaller spending allotments to cover actual needs.

The budget has to come first. In a normal year, the President, with input from all the federal agencies, creates a budget proposal that details what he thinks the government should be doing and how much he thinks they need to spend to do it. He presents that to the House and Senate and they laugh, throw it over their shoulders and write their own versions of a budget based on their own set of ideas and priorities. The House releases their version first (that may be a hard and fast rule or tradition, I can’t remember right now). It’s usually radically different than the President’s version and filled with incredibly partisan concepts specific to the party in leadership at the time. The Senate then looks down their snooty noses at the House version and writes a third version of the budget which usually looks totally grounded in reality compared to whatever the House proposed.

Then there’s a flurry of hearings, votes, speeches, press conferences, and arguments on the two different versions. Eventually, the two chambers figure out a compromise that everyone can live with and also complain about on tv. That’s called the Budget Resolution.

Once the top-line spending allowances for the year are set up, the appropriations committee takes those numbers and divides them up and allocates them to different programs. That process also starts in the House and is just as messy and combative as the budget process only more lobbyists get involved because they want to make sure that when the pie is divided up, their piece is as big as it can be.

Usually, all of this is accomplished in the first half of the calendar year. The government’s fiscal year goes from October 1 to September 30 so spending appropriations need to be established by the end of September in order for agencies to be allowed to draw money to operate in the next fiscal year. Without appropriations bills signed into law, the money stops flowing.

In 2010, the President presented his budget early in the year. And then the process stopped cold. No one in either the House or the Senate had much appetite to make hard choices about spending because it was an election year and everyone and their brother has an opinion about how much the government does and should spend. That meant the previous year’s budget resolution stayed in effect and Congress could have moved on to appropriating but they didn’t. Rather than go on the record with a series of new proposals and votes on spending, they passed something called a Continuing Resolution (CR) which basically continues an existing law that would otherwise expire. In this case, it permits previously agreed upon money to keep flowing to the agencies even after the end of the fiscal year on September 30. This kind of thing is totally legal and happens fairly frequently on all kinds of bills, especially when Congress is closing in on a deadline and is worried they won’t make it. They pass a CR to keep an existing program going while they work out the last of the details of whatever permanent legislation they’re working on.  Last year they passed four successive CRs to extend funding, each with a new end date, at basically the same funding levels as they were already getting, to keep the government going past the election and into the new Congress.

Enter the new Congress. They all know they need to authorize spending through September 30 of 2011 in order for the agencies to keep functioning. They’ve been trying to do it for months now. However, they can’t agree on how much to spend, which is a drama all its own and could be a separate post. What they’ve been doing instead is passing very short CRs  every week or two since March. In essence, Congress is saying “Here’s enough money for you to keep working for two weeks. Call us then and we’ll let you know what comes next.” Each CR has shaved off more money from the total allowable spending levels and that’s the root of all the disagreements. The Republican-led House and the Democratic-led Senate and the Democratic-occupied White House has been compromising so far but patience is about to run out and negotiations are threatening to break down.

The latest of these CRs runs out on Friday. The House and Senate are coming up with another CR that would last until the end of September but because of rule pertaining to how long they each need to consider a bill before voting on it, it probably won’t be ready before the current CR runs out. The House leadership offered a stop-gap CR to cover the time between when the current CR runs out and when they can vote on the bigger one (assuming they finish it, which is still up in the air) but that stop-gap one is filled with spending cuts that the President hates and would veto so the CR would never become law.

Unless the Congress can come up with a CR for the rest of the fiscal year and do it really fast, the flow of funding to the government agencies will shut off at midnight on Friday. Without money, they can’t function. There are emergency plans in place to keep essential services going but everything else will be put on hold and government workers will be furloughed.

What does a shut-down mean for you? Hard to say. It depends on how long it lasts and what services you try to access. If your 8^th grader is coming to DC for their class trip during a shut-down, they can kiss visiting any Smithsonian museums or the Zoo good-bye since those are all federal programs. Oh, and National Parks might be closed. IRS refunds could be delayed (you still have to file though). People may not be able to file new Social Security and Medicare claims. I’m not sure if doctors will receive payments for services they provide to Medicare patients. All kinds of different things will be affected but you may or may not be touched by it.

Right now my Facebook wall is filled with status updates of friends of mine speculating whether they’ll have to go to work on Monday morning. If the government shuts down, my daycare will have to close because it’s housed in a federal building. The teachers will still get paid because they are not federal employees and the daycare board decided that the teachers shouldn’t suffer because Congress can’t play nice. But to pay the teachers, parents need to pay tuition as usual despite whatever other expenses they’ll be incurring to arrange for emergency care during the shutdown. I’ve considered calling Speaker Boehner and asking him to babysit during a shut-down but he’s a smoker and I don’t want my son breathing second-hand smoke.

Anyway, that’s the quick and dirty rundown on what’s going on. I think Congress will still be open during a shut-down so, as always, you’ll be able to exercise your Constitutional right to call them and tell you what you think of the job they’re doing. Or their utter and profound failure to do their job at all.

P.S. None of this has anything to do with the House budget proposal released yesterday. That is for the fiscal year that starts in October 2011. All of the CR/shutdown stuff has to do with spending before September 30, 2011.