Shutdown Ends, Government Funded with 3-Month Continuing Resolution

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After a 16-day government shutdown and just before the U.S. was set to reach its borrowing limit, Congress cleared, and the president signed H.R. 2775, the Continuing Appropriations Act, 2014, a measure to reopen the government and lift the debt ceiling. The law funds the government through January 15 at the Fiscal Year 2013 post-sequestration spending level and suspends the debt limit until February 7.

Federal workers, including about 800,000 who were furloughed due to the shutdown, will receive back pay. The bill appropriates funds for payments made under the Pay Our Military Act, which ensured that members of the military would continue to receive their pay during the shutdown.

Republicans and Democrats also agreed to open a Budget Conference Committee on a budget resolution for Fiscal Year 2014 and set a deadline of December 13 to produce a framework for the 12 appropriations bills and potentially broader changes to entitlement programs and taxes. Among the largest budgetary issues is how much money will be spent on defense programs. Congress is currently faced with a $498 billion cap to comply with the 2011 Budget Control Act for 2014, down from a $518 billion cap for 2013.  The Senate and House Budget Committees will have to reconcile the two very different budget resolutions while meeting budgetary restrictions.

In addition to provisions funding the government at current levels, included in the bill is language prohibiting the Department of Defense from “new starts”, using funding for the production/procurement of items not already funded in FY13 or prior year appropriations bills. Defense industry trade groups had been lobbying hard for the end of the shutdown, facing reduced ability to conduct exports during the shutdown, on top of already reduced appropriations due to the effects of sequestration.

In addition, the bill includes an increase in the administrative budget provided for the Department of Veterans Affairs (VA). The increased budget addresses concerns during the shutdown about the VA's ability to continue to process backlogged claims and appeals of veteran benefits, an issue that had been receiving attention from veterans, Veteran Service Organizations (VSO’s) and Congress before the shutdown.  While VA claims themselves were not affected by the shutdown, the VA administrative staff was impacted by furloughs, meaning that the claims backlog remained in place during the 16 days of the shutdown.  In addition, there was no overtime pay for claims processors to address the claims backlog. The increased administrative budget represents a step towards making sure that benefits claims by veterans, servicemembers, and their families are processed in a expeditious manner, which is crucial to those who rely on VA benefits and services. With such appropriations having been enacted, VA will be able to make its benefit payments to approximately 5 million veterans, survivors, and their families on November 1, 2013 as scheduled.

Not included in the deal was a sequester flexibility provision to allow departments and Executive Branch agencies to cut spending in more individually-tailored ways instead of the across-the-board cuts mandated by sequestration.  

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