Impact of Government Shutdown

As you are already aware, the federal government partially shut down on October 1 following a lapse of appropriations from Congress.  To fund the government without a formally adopted budget, Congress has been passing short-term stopgap spending measures, known as continuing resolutions (CR).  The recent CR expired after September 30, following weeks of negotiations among House and Senate leadership and a series of back-and-forth votes leading into the final hours of the fiscal year on Monday, September 30.

While Congress continues to work toward passing a new CR and the duration of the shutdown remains uncertain, we wanted to make you aware of how the shutdown may impact your operations.  The White House also released a comprehensive list of contingency plans for the various federal agencies, available here.  Additionally, the Congressional Research Service recently released a report that provided an overview of the federal government shutdown processes.

Many agency staff members have been furloughed, but FMI has been in touch with many of the federal agencies to learn more about the effects of the shutdown to prevent any unnecessary disruptions to our industry.


U.S. Department of Agriculture, Food and Nutrition Service
SNAP
Supplemental Nutrition Assistance Program (SNAP) benefits will not be affected by the government shutdown.  Click here to access the complete FNS shutdown plan.  From 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.”

WIC
In contrast to SNAP benefits, there is no additional federal funding available to support the WIC program, however, FMI has been in contact with state WIC agencies and compiled a comprehensive overview of the status of WIC benefits on a state-by-state basis.  Many states still have funds available for WIC benefits for a short period – one-two weeks in some cases – while others still need to provide additional guidance.  We will inform the appropriate representatives in your companies if we learn of additional information.  Click here to view FMI’s state-by-state status chart.

From USDA FNS Office of the Chief Communications Officer (OCCO):

“USDA is working with WIC State agencies to use all available funding resources to provide benefits to participants.  FNS will be allocating both contingency and carryover funds to State agencies for use in operating their FY 2014 WIC Program, in addition to other available funds.  Should a lapse extend through late October, federal WIC funding may not be sufficient to cover benefits.”
“Given a combination of unspent funds available to states from fiscal year 2013 and a small $125 million contingency fund that was appropriated for fiscal year 2013 and distributed by USDA/FNS yesterday, WIC state agencies should now have enough money to keep clinics open until the end of the month,” the Rev. Douglas Greenaway, president of the National WIC Association, said in an email.

Food and Drug Administration
According to the Department of Health and Human Services, 55% of FDA will be retained in a shutdown, while 45% will be furloughed.  Click here to access the complete HHS shutdown plan.  From FDA:

“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.”

Status of FDA food recalls during the government shutdown:

FDA’s food recall staff members are presently furloughed, though that status may change soon.  For the present time, FDA is not processing class 2 and 3 recalls.  However, the agency is processing class 1 recalls.
U.S. Department of Agriculture, Food Safety Inspection Service
Given the interest during the sequester, we wanted to make note that USDA’s Food Safety Inspection Service federal meat, poultry and egg products inspection and other reimbursable programs are not affected.  The agency will continue to offer those services to industry and will maintain the appropriate supervisory, administrative and technical support as necessary.  Click here to access the complete FSIS shutdown plan.

U.S. Department of Agriculture, Agricultural Marketing Service Programs
Similarly, AMS reimbursable programs, such as meat, poultry (including eggs) and dairy grading are not furloughed; programs that rely upon appropriated funds, such as country-of-origin-labeling and mandatory price reporting programs are furloughed.  All employees associated with the COOL program are furloughed; it is possible there still might be some inspections that were scheduled using last year’s funds, but most likely the program is effectively shut down.  Click here to access the complete AMS shutdown plan.

Health Care
Enrollment and information regarding Health Care “Marketplace” Exchanges for individuals and small business owners remain open.

Labor Programs and Rulemakings
Agencies such as the Department of Labor (DOL), Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC), among others, are affected by the shutdown with many of the agency officials on furlough until further notice.  As a result, expected upcoming rulemakings may be delayed, such as DOL’s so-called “persuader” regulation, which had an anticipated publication date of November 2013.