Washington Snapshot - October 18, 2013
After nearly three weeks of a costly government shutdown and partisan wrangling over government spending, the Affordable Care Act (“Obamacare”), and the debt ceiling limit, Congress struck a deal that opened the government and suspended the debt ceiling. President Obama signed the bill into law a little after midnight on Wednesday. Yesterday, federal workers began trickling back to work, government services that were cut off during the shutdown began to ramp up again, and life began to return to normal here in D.C.
A Fiscal Deal Emerges
Besides opening the government, what else does this deal accomplish?
The “Default Prevention Act of 2013” serves three main purposes:
(1) it funds the federal government through January 15th, 2014;
(2) it suspends the debt ceiling until February 7th, 2014; and
(3) it calls for a budget conference committee that is charged with reconciling the budgets that the Senate and House passed earlier this year by December 13th, 2013.
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In essence, the law allows the government to open again for now and prevents us from defaulting on our nation’s debt obligations in the near future. Among other things, it also gives federal workers back pay for the duration of the shutdown and reimburses states and other federal grantees for the costs of administering programs during the shutdown that are normally paid for by federal dollars.
The law doesn’t change the spending cuts known as “sequestration,” which are set to kick in and reduce the federal budget on January 15th, 2014—the same day this funding bill elapses. While funding for the Affordable Care Act was the primary fuel behind the shutdown, the legislation does not defund the healthcare law or make any significant changes to it.
So is the fiscal stalemate over?
Yes, for now. But, before January 15th, 2014 when this funding bill expires, another funding bill will need to be passed to prevent the government from closing again. If the budget conference committee agrees on a budget in December, the January spending negotiations could go much more smoothly than this past round. However, there is no guarantee that the committee will reach a compromise on the House and Senate budget resolutions, each of which proposes very different 10-year spending and revenue paths. Yet, Senate Finance Committee Chairman Max Baucus (D-MT) is optimistic that the budget conference talks could pave the way for tax reform. In addition, many congressional Democrats aim to tackle the sequestration spending cuts.
Similarly, the debt ceiling debate is only on pause. Congress suspended the statutory debt limit but did not amend it. While investors and the markets demonstrated relief over a temporary debt ceiling suspension, market concerns persist over the new February 7th deadline. By that date, the debt limit will need to be suspended again, raised in statute, or Treasury will need to use "extraordinary measures" to shift around cash balances and obligations to effectively extend the period before the debt ceiling will again be reached.
What does this mean for federal grantees?
Government workers may have returned to work, but it may still take as long as a few months for business to resume as usual in federal agencies. Many agencies are nearly three weeks behind schedule and are facing a hefty backlog of work, including grant and contract applications that will need to be processed before federal dollars can begin flowing. We suggest contacting federal agencies directly to determine their individual timeframes for getting their grant dollars out to grantees.
We will keep you posted!
The long-term policy implications and real-world consequences of the shutdown and debt ceiling suspension are still unfolding. We will keep you up to speed on what these developments mean for philanthropy moving forward.
Interesting Articles and Op-Eds this week
Shutdown advocacy efforts
Throughout the past few weeks, we’ve shared stories of how the shutdown impacted charitable organizations around the country. At least one organization sent its story directly to Congress. Check out the Council’s blog post on a letter from Juanita T. James, President and CEO of the Fairfield County Community Foundation, to her representatives in Congress. James shared how the government funding impasse affected the community her foundation serves, and urged lawmakers to take action.
Council President and CEO Vikki Spruill named one of the "Top 20 Women in Philanthropy"
Yesterday we learned that the Council’s President and CEO, Vikki Spruill, was named #4 among the “Top 20 Women in Philanthropy” by Michael Chatman, founder of Philanthropy Speakers Agency and host of #WHYiGIVE. We congratulate Vikki on this wonderful honor, and we are thrilled to be working with such an influential leader to fulfill the Council’s vision of advancing the common good!
HUD Secretary's Award for Public-Philanthropic Partnerships
Secretary of the U.S. Department of Housing and Urban Development Shaun Donovan and Council President and CEO Vikki Spruill recognized 10 philanthropic funders with the 2013 Secretary’s Award for Public-Philanthropic Partnerships. These organizations were recognized for enhancing the quality of life for low-income and moderate-income families. The projects addressed issues concerning housing and neighborhood improvements, education, health and recreation, transportation, arts and culture, public safety, sustainability and economic development.
We have been sharing with you the award winning projects over the past several weeks. Here are the next two winners!
The Rhode Island Foundation-Green and Healthy Homes Initiative Providence
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The Rhode Island Foundation, established in 1916, is one of the oldest community foundations in the country, with assets estimated at $700 million. As a direct result of the public-philanthropic partnership between the Foundation and the City of Providence, Providence was awarded designation as a Green & Healthy Homes Initiative™ (GHHI) site in early 2010. GHHI addresses substandard housing by braiding categorically separate but mission-related funding and programs, and by leveraging federal, state, local and philanthropic resources. In January 2013, with leadership from the Foundation, the City of Providence, the Coalition to End Childhood Lead Poisoning (Coalition), and the GHHI Providence Steering Committee made up of more than 30 city and state organizations and agencies, the first phase of the GHHI Providence Neighborhood Innovation Pilot was completed.
The Saint Paul Foundation
Since 1940, thousands of generous individuals committed to the Saint Paul area have made charitable gifts to The Saint Paul Foundation. Today, the Foundation is the state’s largest community foundation. Guided by the legacy of its earliest donors, the Foundation helps donors achieve their charitable giving goals and have long-lasting impact in the community. The Foundation is an affiliate of Minnesota Philanthropy Partners. The Saint Paul Foundation supports large-scale, cross-sector initiatives including the 13-member Central Corridor Funders Collaborative begun in 2008 and the regional Corridors of Opportunity initiative launched in 2011.
Both initiatives are focused on working with others — local resident organizations, community groups, nonprofit and business coalitions, and public agencies — to create and implement strategies aimed at ensuring that the adjoining neighborhoods, residents and businesses broadly share in the benefits of public and private investment along the region’s transitways.
Keep in touch!
Please feel free to reach out to any of us on the public policy team with any comments or concerns, or if you have an issue you’d like to see covered in Snapshot.
