Federal Update: Government Shutdown Averted

By:

Michael Wallace
Olivia Hodge

October 3, 2023 - (3 min read)

Last week, NLC advocated in opposition to the likely federal government shutdown. Over the weekend, Congress unexpectedly changed course and approved a Continuing Resolution that will temporarily keep the government open for 45 more days.

Federal government shutdowns occur when budget and appropriations disagreements between House, Senate, and White House leaders reach an impasse that cannot be resolved before the start of a new fiscal year. If Congress was not able to pass legislation to fund the federal government past midnight on September 30, 2023, it would have triggered a federal shutdown. A government shutdown would have adverse impacts on many of America’s 19,000 cities, towns and villages.

In addition to the 45-day Continuing Resolution that moves the deadline for completing work on FY2024 appropriations from September 30 to November 17, 2023, Congress also approved short-term extensions of the Federal Aviation Administration and the National Flood Insurance Program, which are NLC priorities.

Congress will need to maintain some spirit of ongoing bipartisanship to avoid the next potential shutdown when the current Continuing Resolution ends on November 17^th.

Additionally, the Continuing Resolution allocated an extra $16 billion for FEMA’s Disaster Relief Fund (DRF), which is vital for covering shortfalls and supporting communities facing natural disasters. This funding ensures prompt response, recovery and infrastructure restoration after catastrophes, offering critical aid to affected areas.

This bill passed with strong bipartisan support in the House by a vote of 335 to 91, and in the Senate by a vote of 88-9. President Biden signed the bill into law late Saturday night, avoiding a government shutdown with only a few hours to spare.

FAA Reauthorization

The Continuing Resolution extends the Federal Aviation Administration’s authority to operate and collect aviation taxes through December 31, but Congressional action will be needed by the Senate to advance a reauthorization bill to conference with the House’s passed legislation (H.R. 3935). The bill also includes an extension for the Department of Homeland Security’s counter-drone authorities through November 18, which remains important to protecting key local large gatherings, including national sporting events.

National Flood Insurance Program Reauthorization

The Continuing Resolution includes another short extension for the National Flood Insurance Program (NFIP). Since the expiration of NFIP’s last long-term authorization on September 30, 2017, the program has relied on 26 short-term extensions. NLC has backed the NFIP-RE Act of 2023 (H.R.4349/S.2142), aiming to establish enduring stability for the National Flood Insurance Program. This comprehensive legislation tackles crucial issues such as rate increases, affordability, solvency, mitigation efforts, mapping precision, oversight and reforms in the claims process.

What Happens Next

While the government did not shut down this weekend, the underlying policy conflicts and political uncertainty that drove Congress to the cusp of a government shutdown have not really been addressed. The likelihood of Congress finding consensus on all 12 federal spending bills before the new November 17, 2023 deadline is low. Fractious issues remain, including ongoing opposition to overall spending levels that Speaker McCarthy and President Biden agreed to months ago, additional security funding for the defense of Ukraine, funding for border security and finalizing reauthorization for FAA and NFIP.

At the same time, these challenges should not detract from the breakthrough in bipartisanship that prevented the shutdown when it appeared inevitable to almost everyone. Congress will need to maintain some spirit of ongoing bipartisanship to avoid the next potential shutdown when the current Continuing Resolution ends on November 17^th.