Government Shutdown Ends

January 24, 2018

On Jan. 22, the Senate voted 81-18 to end the three-day-old government shutdown, with 33 Democrats joining Republicans to fund the government through February 8, 2018 in exchange for a promise from Republican leaders to discuss a legislative solution for the Deferred Action for Childhood Arrivals (DACA) program.

The stopgap bill also funds the Children’s Health Insurance Program (CHIP) for six more years. CHIP, which is jointly run by the federal government and individual states, provides health coverage to approximately nine million children. Although the program is broadly popular across party lines, Congress failed to reauthorize spending on CHIP in September, and several states were on the verge of running out of funds for the program before the shutdown deal was reached.

The stopgap measure also delays or suspends a handful of tax increases that were to help pay for insurance coverage under the Affordable Care Act (ACA). Specifically, the health insurance tax (HIT) on insurers, which was projected to collect more than $14 billion in revenue this year, was suspended for one year. It now is set to take effect in 2019. The 2.3 percent medical device tax was delayed for two years, until January 2020, after having previously been extended. The Congressional Budget Office had estimated that a total of $3.27 billion would have been collected from device makers this year and in 2019 if the tax were in effect. Also delayed for two additional years was the “Cadillac tax,” which would impose a 40 percent surcharge on job-based health insurance coverage with premiums of more than $10,200 per year for individuals and $27,500 for families. The tax will be delayed until 2022. There had already been a prior suspension of the tax, which originally was supposed to take effect this year.

After a weekend of partisan finger-pointing, both Senate leaders—Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Chuck Schumer (D-N.Y.)—came to an arrangement to adopt the three-week spending measure while continuing to negotiate a global agreement that would include the fate of the dreamers, undocumented immigrants brought to the U.S. as children. Sen. Schumer said he believes Leader McConnell will hold a vote, with an open process, on DACA in the near future. However, the decision is dividing Democrats, with 16 of them voting against the measure, saying they did not get enough of a guarantee on DACA.

Once it cleared the Senate on Monday afternoon, the House quickly approved the stopgap measure by a 266-150 vote. President Donald Trump signed the measure on Monday night, officially ending the standoff, for the time being. While the government shutdown has ended for now, lawmakers will need to reach an agreement within three weeks or pursue immigration legislation after Feb. 8.

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