Congress appeared headed toward a government shutdown as the House voted on Sept. 29 to send a short-term government funding bill back to the Senate after attaching provisions to delay the implementation of health care reform for one year and repeal the medical device excise tax.
Senate leaders promised to reject the amendments when they returned to session on Monday, Sept. 30. Democrats said they would attempt to strip the provisions from the bill and send the funding resolution back to the House, just as they did when the House passed a funding bill that would have cut all spending on the implementation of the health care reform bill. If the House and Senate cannot agree on a new funding resolution, much of the federal government will shut down beginning on Tuesday, Oct. 1.
The IRS recently posted a contingency plan that indicated it would shutter call centers and stop examination and appeals activity if the government shuts down. IRS criminal investigations would remain active.
Congress often finds compromise just before a deadline, and lawmakers may reach a last-minute agreement before midnight or after a short shutdown. Democrats appear unwilling to budge on the implementation of health care reform, though a repeal of the medical device excise tax is possible. The tax is also unpopular with many Democratic lawmakers.
Even a last-minute agreement may not fully resolve the budget crisis. The current version of the spending bill would fund the government only through Dec. 15, and Congress must also raise the federal debt limit. Treasury recently announced it expects to be unable to pay all U.S. obligations on Oct. 17 unless the debt limit is increased. House Republicans had planned to vote last week on a debt limit bill that would have created an expedited process for tax reform and addressed a host of other Republican priorities, but they pulled the bill after support waned and have not announced further plans. The president still maintains he will not negotiate over the debt limit. The Senate has not yet acted on a debt limit bill.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.