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Week In Review

The Intersection of Federal Appropriations and Sequestration Effects for Families



With some important exceptions, mandatory or entitlement programs are not affected by the inability of Congress to pass a Continuing Resolution (CR), but the October 1 sequestration of nonexempt direct spending is in effect.  Office of Management and Budget (OMB) calculates sequestration of nonexempt direct spending requires reductions of 2 percent to nonexempt Medicare spending, 7.3 percent to other nonexempt non-defense mandatory programs, and 9.8 percent to nonexempt defense mandatory programs.

Funding for quarterly formula grants will not be made for the following programs: Temporary Assistance for Needy Families (TANF), Child Care, Social Services Block Grant, Child Welfare Services, Community Services Block Grant.

Funding for Supplemental Nutrition Assistance Program (SNAP) will continue through the month of October. For some of these programs, the budget authority exists through an appropriation bill.  To date, OMB has not released any guidance on how a disruption in funding will impact those programs.

The US Department of Health and Human Services and the US Department of Agriculture are providing guidance as to their programs are affected. Education provides some less detailed guidance via their program plans.


According to USDA, SNAP will continue operations and eligible households will still receive monthly benefits for October. The authority to make October benefit payments comes from the Recovery Act, through which Congress provided “such sums as are necessary” to finance the SNAP benefit provided for in the Recovery Act. In addition, about $2 billion in contingency funding will be available and could be used to support State Administrative activities essential to continue the program and issue and process benefits. These contingency funds were provided in the FY 2013 appropriation and do not expire until the end of FY 2014.

No additional federal funds would be available to support the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)’s clinical services, food benefits and administrative costs. States may have some funds available from infant formula rebates or other sources, including spend-forward authority, to continue operations for a week or so, but States would likely be unable to sustain operations for a longer period. Contingency funds will be available to help States, but even this funding would not fully mitigate a shortfall for the entire month of October.

The Child Nutrition (CN) Programs, including School Lunch, School Breakfast, Child and Adult Care Feeding, Summer Food Service and Special Milk will continue operations into October. Meal providers are paid on a reimbursement basis 30 days after the end of the service month. Limited carryover funding will be available during a lapse to support FY 2014 meal service. Once an appropriation is enacted, we expect additional resources will be available to reimburse October performance. In addition, most State agencies will continue to have fiscal year 2013 funds available for State Administrative Expenses (SAE). SAE funds are awarded to States for a two year grant period and they are permitted to carryover up to 20 percent of their allocation into the second year of the grant period.

No additional federal funds would be available to support the Commodity Assistance Programs (CAP) including the Commodity Supplemental Food Program (CSFP), The Emergency Food Assistance Program (TEFAP) administrative funding, and the WIC Farmers’ Markets Nutrition Program (FMNP). Similarly, no new funds will be available to support the Food Distribution Program on Indian Reservations (FDPIR). While there would be some inventory available for use in food packages, no carryover, contingency or other funds would be available to support continued operations.


Activities that involve safety of human life and protection of property are to be continued, with the summary of programs below:

Indian Health Service (IHS) will continue to provide direct clinical health care services as well as referrals for contracted services that cannot be provided through IHS clinics. IHS will not be able to provide funding to Tribes and Urban Indian health programs, and would not perform national policy development and issuance, oversight, and other functions, except those necessary to meet the immediate needs of the patients, medical staff, and medical facilities.

Health Resources and Services Administration (HRSA) will continue activities funded through sources other than annual appropriations including the Community Health Centers, National Health Service Corps, Maternal Infant, and Child Health Home Visiting program. Additionally, HRSA would continue the National Practitioner Databanks and Hansen’s Disease Program. HRSA will not be able to make payments for the Children’s Hospital GME Program and Vaccine Injury Compensation Claims. Monitoring of Ryan White Grants – particularly AIDS Drug Assistance Program Grants, Emergency Relief Grants and Comprehensive Care would be insufficient to assure states, cities and communities are complying with statutory guidance and necessary performance.

Administration for Children and Families (ACF) will continue mandatory funded programs including the Federal Parent Locator Service, Personal Responsibility Education, and Health Profession Opportunity Grants. Child support and foster care services will also continue because they receive advanced appropriations in the FY 2013 appropriation process. All permissible activities for the Unaccompanied Alien Children program under an exception of preserving human life will continue. ACF will not continue quarterly formula grants for Temporary Assistance for Needy Families, Child Care, Social Services Block Grant, Refugee Programs, Child Welfare Services and the Community Service Block Grant programs. Additionally new discretionary grants, including Head Start and social services programs, would not be made.

Administration for Community Living (ACL) will continue to support the Aging and Disability Resource Centers and Health Care Fraud and Abuse Control through mandatory appropriations. ACL will not be able to fund the Senior Nutrition programs, Native American Nutrition and Supportive Services, Prevention of Elder Abuse and Neglect, the Long-Term Care Ombudsman program, and Protection and Advocacy for persons with developmental disabilities.

Substance Abuse and Mental Health Services Administration (SAMHSA) will continue programs such as the Disaster Distress Helpline, Treatment Locator, Treatment Referral Line, and Suicide Prevention Lifeline using available grant balances.

Assistant Secretary for Preparedness and Response (ASPR) will continue to maintain minimal readiness and limited staffing for all-hazards preparedness and response operations including the Secretary’s Operations Center, the National Disaster Medical System, and specialized medical countermeasure response under the safety of human life exception.

National Institutes of Health (NIH) will continue patient care for current NIH Clinical Center patients, minimal support for ongoing protocols, animal care services to protect the health of NIH animals, and minimal staff to safeguard NIH facilities and infrastructure. NIH will not admit new patients (unless deemed medically necessary by the NIH Director), or initiate new protocols, and would discontinue some veterinary services. NIH will not take any actions on grant applications or awards.

Centers for Disease Control and Prevention (CDC)  will continue minimal support to protect the health and well-being of US citizens here and abroad through a significantly reduced capacity to respond to outbreak investigations, processing of laboratory samples, and maintaining the agency’s 24/7 emergency operations center. CDC will continue activities supported through mandatory funding including the World Trade Center health program, U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), CDC’s Global AIDS program, the Energy Employees Occupational Illness Compensation Program Act (EEOICPA), Vaccines for Children (VFC) program, and certain childhood obesity activities and asbestos exposure in Libby, Montana. CDC will be unable to support the annual seasonal influenza program, outbreak detection and linking across state boundaries using genetic and molecular analysis, continuous updating of disease treatment and prevention recommendations (e.g., HIV, TB, STDs, hepatitis), and technical assistance, analysis, and support to state and local partners for infectious disease surveillance. ASPR will be unable to fund activities related to medical countermeasures against chemical, biological, radiological, nuclear, and emerging threats, the Hospital Preparedness Program, and fully staff the National Disaster Medical System. Additionally, the potential assistance to Colorado in recovering from recent unprecedented flooding and the preparation to respond to H7N9 influenza or MERS incident could be delayed.

Agency for Healthcare Research and Quality (AHRQ) will continue to maintain oversight of ongoing projects funded by the Patient-Centered Outcomes Research Trust Fund (PCORTF) and would continue CMS-funded work related to measure development for the Children’s Health Insurance Program Reauthorization Act. AHRQ will not be unable to fund new grants and contracts related to health services research initiatives, including research on improving patient safety and reducing healthcare-associated infections. In addition, the data collection and modifications to the household survey of the Medical Expenditure Panel Survey would be stopped.

Food and Drug Administration (FDA) will continue limited activities related to its user fee funded programs including the activities in the Center for Tobacco Products. FDA will continue select vital activities including maintaining critical consumer protection to handle emergencies, high-risk recalls, civil and criminal investigations, import entry review, and other critical public health issues. FDA will be unable to support the majority of its food safety, nutrition, and cosmetics activities. FDA will also have to cease safety activities such as routine establishment inspections, some compliance and enforcement activities, monitoring of imports, notification programs (e.g., food contact substances, infant formula), and the majority of the laboratory research necessary to inform public health decision-making.

Centers for Medicare & Medicaid Services (CMS) will continue large portions of ACA activities, including coordination between Medicaid and the Marketplace, as well as insurance rate reviews, and assessment of a portion of insurance premiums that are used on medical services. In the short term, the Medicare Program will continue largely without disruption during a lapse in appropriations. Additionally, other non-discretionary activities including Health Care Fraud and Abuse Control, Center for Medicare & Medicaid Innovation, and Pre-existing Condition Insurance Plan activities would continue. States will have funding for Medicaid on October 1, due to the advanced appropriation enacted in the FY 2013 appropriations legislation, as well as for the Children’s Health Insurance Program (CHIP). CMS will be unable to continue discretionary funding for health care fraud and abuse strike force teams resulting in the cessation of their operations. Fewer recertification and initial surveys for Medicare and Medicaid providers would be completed, putting beneficiaries at risk of quality of care deficiencies.


For a lapse occurring during the first week of October, the authorized obligations would include the $22 billion in advance appropriations for formula grants to States under Titles I and II of ESEA, IDEA Part B State Grants, and Career and Technical Education.  These funds, which were included in the 2013 appropriation, are normally obligated on October 1 and provide the second installment of critical funding under annual allocations for the school year that began July 1. These funds are already appropriated and do not require further Congressional authorization.  The Department believes that any delay in obligating these funds could, in some cases, significantly damage State and local program operations.  Particularly in light of recent Federal and state funding reductions, the Department considers the October obligation of advance appropriations for formula grants to States under Titles I and II of ESEA, IDEA Part B State Grants, and Career and Technical Education as a necessary exception requiring a limited number of employees to work in the absence of an appropriation of separate administrative funds.

If the interruption were to last longer than one week, the Department would phase in employees only as necessary to conduct other excepted activities to prevent significant damage to the underlying activity.  At most, a total of not more than six percent of the total staff would be called back to work during a longer interruption.  (Some employees would be called in on a partial or rotating basis; the combined number of excepted employees working at any given time would not exceed approximately 6 percent of the Department’s total full-time equivalents (FTEs).)  As of September, the Department employed 4,225 full and part-time employees.

Programs using mandatory or multi-year funding from a prior year would continue to operate through a government shutdown.  For these programs, staff may be brought in on an excepted basis to make payments for the following activities:

Programs which can make obligations and payments include Pell Grants and Federal Direct Student Loans.  Approximately 20 non-mandatory programs are expected to have remaining unobligated balances from FY 2013, multi-year, or no-year discretionary appropriations and/or advance funds appropriated in FY 2013.  Obligations and payments from these programs may continue, dependent on the length of the lapse.  Only those grant activities which, if not continued, would prevent or significantly damage the execution of funded functions, will continue on a limited basis after a lapse of one week and continue through a short-term shutdown.  Three programs – Race to the Top, Investing in Innovation, and Promise Neighborhoods – have funds that are available through December 31, 2013, and must be obligated by this date.

Non-mandatory programs that do not have available unobligated balances from FY 2013 may not incur new obligations while under a government shutdown caused by a lapse in appropriations. Program funds for Pell Grants and Direct Student Loans are provided through mandatory and carryover appropriations.  Over 14 million students receive student aid, in the form of grants and loans, at over 6,600 schools through these programs.  As a result of the permanent and multi-year appropriations, Pell Grants and student loans could continue as normal.  Staff and contractors associated with these areas will continue to work, and only skeletal program operations would continue under the “significant damage” standard.  Mandatory and carryover funding is also available for servicing contracts and many other administrative functions.


Compiled from various sources at US HHS, USDA and Education:
HHS dmemo (1)
usda-fns-shutdown-plan (2)
contingency-plan–ed (1)


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