Bipartisan Senate Deal to End Federal Shutdown and Raise Debt Limit

After weeks of drama, Senate leaders today announced a bipartisan deal to end the federal government shutdown, address the debt limit and send the House and Senate dueling FY14 Budget Resolutions to conference.  While the timing remains unclear, it seems likely the Senate will vote on the measure this evening, followed at some point tonight by the House and then to the President for his signature.  It is not yet clear when the federal government will reopen since the timing is difficult to predict, but it may be as early as tomorrow.   

As described, key provisions of the Senate legislation would:

• Reopen the federal government at current funding levels until January 15, 2014
• Suspend the federal debt limit through February 7, 2014
• Specify that a conference committee on the FY14 Budget Resolutions report by December 13, 2013
• Provide pay to federal workers for the shutdown period
• Ensure stronger income verification for insurance subsidies provided by the Affordable Care Act

The deal emerged today after the failure yesterday of House leaders to construct an alternative plan that could pass.  Both Senate leaders and bipartisan groups of Senators met throughout the day to pull this plan together and form a strong consensus on moving forward to end the crisis.  There remain some in the Senate that disagree with this approach, but they have indicated they will not seek to block it with parliamentary delaying tactics.  It is expected the legislation will get a very strong vote in the Senate when it is brought up later today.  The House is expected to have a harder time, but will have a majority.  Democrats in the House have indicated they will support the legislation but Republicans remain mostly opposed.  That said, Speaker Boehner has indicated he will bring it up, even though it does not seem to enjoy support from the majority of the majority.  This violates the so-called “Hastert Rule”, the recent custom that has thus far precluded a deal involving Democrats making up the deficiency in the majority.   With Democratic votes, the legislation will only need the support of about two dozen Republican members, which seems doable given members’ public positions.

The deal today ends the immediate crisis but does not resolve the underlying issues.  The hope is the return to “regular order” with a budget conference will allow the parties to reach some larger agreement on federal budget and spending priorities going forward.  The timelines adopted intentionally leave open the possibility of adjusting the second year of the sequester – which under current law would automatically take effect on January 15, 2014.  With the continuing resolution included in this deal expiring on that date, it is clear that Democratic leaders will be pushing for modification or elimination of the sequester.  While potentially a hopeful sign of relief, we must note that Senate Republican Leader Mitch McConnell, in announcing the deal, emphasized his commitment to “preserving” the reduced spending specified in the Budget Control Act.

We will continue to keep you informed of further developments and will stay in touch with Harvard’s Office of Sponsored Programs to share information on the government’s reopening and impact on grant funding and applications.  We expect agencies to share guidance on how they will resume normal operations.  As always, please feel free to be in touch with Suzanne Day or Jon Groteboer (at 202 863-1292 or via email at suzanne_day@harvard.edu or jon_groteboer@harvard.edu) with questions or concerns.