Why government shutdown won't stop Obamacare

Government shutdown would grind many federal programs to a halt, but Obamacare isn't one of them. A freeze on spending wouldn't end the program's tax credits for lower-income Americans or mandates.

Here’s a little secret about the conservative GOP push to defund Obamacare: Even if Republicans who oppose the president’s signature health-reform law stand fast and shut down the government over the issue, Obamacare will keep on chugging along.

That’s right. For the most part, the Affordable Care Act (ACA) is armored against attacks on its annual appropriations. So, in that sense, a government shutdown would be the equivalent of taking a swing at Obamacare but hitting the Department of Agriculture instead.

Look, don’t get mad at us – these are the conclusions of the Congressional Research Service, which looked at the issue in July in response to a request from Sen. Tom Coburn (R) of Oklahoma.

“It appears that substantial ACA implementation might continue during a lapse in annual appropriations that resulted in a temporary government shutdown,” says CRS.

Let’s look at the shutdown state-of-play before going further, shall we?

The House on Friday passed a government spending bill that would strip money from Mr. Obama’s health law. Conservatives committed to repealing the law hailed the move as the first step toward its demise.

“Defunding is clearly happening today on a spending measure that defunds it in perpetuity,” said Rep. Tom Graves (R) of Georgia.

And the legislation itself is pretty clear. “No federal funds shall be made available to carry out any provisions of the Patient Protection and Affordable Care Act,” reads the report that accompanies the legislation.

But here’s the thing: That language applies only if the bill becomes law. For that to happen, the Senate has to pass it, and Obama has to sign it. The chances of that happening are zero.

Senate majority leader Harry Reid has pronounced it “dead” in his chamber, and even firebrand Sen. Ted Cruz (R) of Texas has said that Senator Reid probably has the votes to back that up. Plus, would Obama sign a bill that guts his signature domestic achievement? That isn’t going to happen. Obama has already promised he would veto it, if it somehow found its way to his desk.

That leads us to a possible shutdown. Will the House refuse to pass a continuing resolution without the defund Obamacare language? If that happens, many government activities would grind to a halt after Oct. 1. However, implementation of Obamacare would not be one of them.

There are two reasons this is so, according to CRS. The first is that the federal government has multiple pots of money on which to draw when it comes to ACA implementation.

A shutdown would stop government activities that rely on the discretionary funds provided by annual appropriations. But ACA implementation right now is paid for by multiple-year and mandatory spending. That kind of stuff rolls on, pretty much no matter what.

“In the event of a temporary lapse in discretionary appropriations that results in a government shutdown, it seems likely that the Administration will continue to rely on alternative sources of funding to support ACA implementation activities,” writes CRS.

In addition, projected health insurance subsidies for many lower-income Americans aren’t payments, but tax credits. Those aren’t appropriations at all. And even if the government shuts down, the IRS could continue to process these credits.

That brings us to the second reason Obamacare would roll on: Government agencies have some leeway to structure their activities. IRS employees could still take applications from Americans eligible for subsidies, “even if the salaries of the federal employees who are making those determinations have lapsed," according to CRS.

Given that a new defunding Obamacare provision is not going to pass, and a government shutdown won’t shut down Obamacare enrollment, many Republicans in Washington believe the defund effort is all hat and no cattle.

It is not that these members of the GOP support the health-care law. Far from it. It is that they do not see a positive outcome from the current situation.

“It just seems to me that what’s happened unfortunately is that American expectations on Republicans and what they can do have been raised to a level that’s beyond delivery,” said Sen. Bob Corker (R) of Tennessee on Thursday.