GM 19-003

Status of FY 2019 Appropriations and Partial Government Shutdown

FY 2019 Appropriations Status. As of this writing we are in day 17 of a partial government shutdown affecting the Indian Health Service (IHS) and Indian Affairs (BIA/BIE) and many other federal agencies whose FY 2019 funding has lapsed as of December 21, 2018. On January 4, 2019, the House approved legislation (HR 21) on a largely party line vote (241-190) which would fund 6 of the 7 affected appropriations bills using the text of the Senate-passed FY 2019 appropriations bills from last year. The appropriations bills are: Interior, Environment, and Related Agencies; Financial Services and General Government; Transportation-Housing and Urban Development; Agriculture, Commerce-Justice-Science; and State and Foreign Operations.

The House Democrats, now the majority party, likely used the Senate-passed bills of last year because they had been approved by a wide bipartisan margin and, unlike the House-passed bills from last year, do not contain so many controversial policy riders. We point out that the FY 2019 Interior and Related Agencies bill approved by the House last year contains more funding for the IHS and Indian Affairs than does the Senate bill, so that is problematic. For a comparison of the FY 2019 House and Senate Committee recommendations for the IHS see our General Memorandum 18-025 of June 26, 2018 and for Indian Affairs see our General Memorandum 18-032 of August 16, 2018. HR 21 does not include Homeland Security funding which is the bill from which a border wall would be funded; rather the House Democrats’ position is that there should be a short-term extension for Homeland Security while discussions continue. The President has said he will not sign HR 21 and Senate Majority Leader McConnell’s position is that he will not call up that legislation unless the President will sign it. Now, Senate Democrats reportedly are coalescing around a plan to block any legislation on the Senate Floor that does not address the lapse in appropriations and House Democrats are planning to bring up individual FY 2019 spending bills in the House.

Directions for Impacted Federal Agencies and Federal Agency Contingency Plans. The White House’s Office of Management and Budget has created a page ( ) to provide guidance to impacted federal agencies during the lapse in appropriations. This includes both an FAQ document and “special instructions” to agencies (both documents are attached). The page also provides links to each federal agency’s contingency plan. Some federal agencies have made specific contingency plans by bureau and office. For example, under the Department of Interior, the BIA and the BIE each have their own contingency plans (attached). The Department of Health and Human Services has a contingency plan for few agencies for which appropriations have lapsed (including IHS) (attached) as well as a staffing plan (attached) and the IHS as a Dear Tribal Leader Letter (attached).
Generally, federal agencies for which appropriations have lapsed cannot incur obligations except in certain circumstances: when Congress has granted that agency authority to do so, when that agency is taking action to protect human life or property or if the work of certain federal employees is funded from sources other than the yearly appropriations process (such as fees or mandatory funding). Employees whose duties include protecting human life or property are generally “excepted” from the shutdown and required to report to work, albeit without pay. When Congress eventually provides funding to reopen the impacted agencies, those employees usually receive back pay. “Non-excepted” employees are generally furloughed and usually receive back pay as well; however, some Members of Congress object to this and do not want to pay the furloughed employees because they were not performing work during the shutdown. Each agency makes determinations about “excepted” and “non-excepted” employees. Regarding contracts and grants, the FAQ states that generally, routine, ongoing operational and administrative actions relating to contract or grant administration (including payment processing) cannot continue when there is a lapse in appropriations.

Specifically, the BIA’s contingency plan provides categories of excepted required services and activities including: law enforcement, child protection, wildland fire management, irrigation (because it is fee funded) and safety of dams. Because most BIE accounts are forward funded (meaning that the FY 2018 appropriations law provided funding for the 2018-2019 school year) most BIE-funded employees and functions are excepted, including the BIE-funded K-12 school system and tribal colleges and universities. HHS’s contingency plan states that the IHS is to continue to provide direct clinical health care services as well as referrals for contracted services that cannot be provided through IHS clinics. The HHS guidance however, states that IHS can only perform certain national policy development or oversight but is unable to provide the majority of funds to tribes and urban Indian health programs. The IHS’s Dear Tribal Leader Letter states that Indian Self-Determination and Education Assistance Act (ISDEAA) agreements funded by appropriations will be impacted by the lapse in appropriations; however, HHS has determined that that tribally-managed programs operating under ISDEAA agreements are “excepted programs” which must continue to address emergency circumstances although no awards are being made and ISDEAA negotiations are suspended during the shutdown. The IHS suggests using prior year amounts or third party billing revenues to continue operations.

Impacts. Because the lapse in appropriations started just before the holidays, the impacts are just now starting to be felt. In years past when there have been short lapses in appropriations, the impacts have been relatively minor. Because Congress and the President have hardened their negotiating positions, this shutdown has the potential to last much longer and the impacts will grow the longer it lasts. The last extended government shutdown was in 2013.

Please let us know if we may provide additional information about the lapse in FY 2019 appropriations.