Minnesotans feel deja vu as federal government shutdown starts

Minnesotans may feel a bit of deja vu as the federal government shutdown begins today, the start of the 2014 federal fiscal year. It’s only been a few years since we faced our own state government shutdown.

As was true in the 2011 situation, the answer to whether a government service is open or closed depends on how that service is funded. Three main categories of government activities will continue operating:

  • Activities that are funded outside of the annual appropriations process. These are primarily entitlements such as Medicare and Social Security, whose funding is set in a different part of the law (although some entitlements are funded through the appropriations process.)
  • Activities that are funded through the appropriations process but have funding appropriated in previous years that can be used in 2014.
  • Activities that are deemed essential, primarily because they protect life and property.

More detailed information is in federal agency contingency plans on this Office of Management and Budget webpage. Whether a federally funded service is open or closed in Minnesota can also depend on whether the state decides to use other funds to keep services operating.

Here are some of what’s open and closed in areas we follow:

  • Health care: Medicaid (Medical Assistance) has funding for one quarter. Health insurance exchanges (like MNsure) are not affected by the shutdown.
  • Nutrition: SNAP is funded through the end of October. Certain child nutrition programs also have funding into October. WIC has some limited contingency funds.
  • Child care: Both mandatory and discretionary child care funding streams need federal action to receive 2014 funding. States may use funding they already have received or state dollars to continue to provide child care assistance.
  • Housing: There should be no immediate impact on public housing. Rental assistance should continue in October.
  • Welfare to work: MinnPost reports that the Minnesota Department of Human Services will use previously received funding to continue to fund the Minnesota Family Investment Program.

A shutdown doesn’t happen in a vacuum. As was the case in Minnesota in 2011, today’s federal shutdown occurred because the implications of some of the proposals to avoid the shutdown would be worse. For example, the Center on Budget and Policy Priorities notes that the U.S. House’s proposal to keep the federal government running but delay components of health care reform would “cause 11 million more Americans to remain uninsured in 2014 and result in higher premiums for many others.”

The federal government shutdown is not good for the economy or for the American people, and the consequences will worsen over time. Federal policymakers should end the shutdown by adopting common-sense budget choices that support our nation’s fragile economic recovery and do not prevent Americans from accessing affordable health care.

-Nan Madden

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One Response to Minnesotans feel deja vu as federal government shutdown starts

  1. Pingback: Week 2 of federal shutdown: debate widens to include debt ceiling, one-sided deficit reduction | Minnesota Budget Bites

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