Averting Government Shutdown Looks Unlikely

April 7, 2011 | By Liza Casabona | Post a Comment

In a series of eleventh-hour efforts to avoid the government shutdown, budget negotiators met through the night on Wednesday and President Obama called House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., back to the White House today for an afternoon meeting,  which started around 1 p.m.

Obama called the meeting even as a raucous noontime debate on the House floor over a Republican-sponsored continuing resolution to extend government funding for another week (and cut an additional $12 billion in spending) highlighted how ideological and fractious the negotiations have been. Obama issued a statement of administration policy saying that he would veto the temporary CR if it came to his desk, making the floor debate a largely rhetorical exercise.

Following a meeting on Wednesday night, Obama, Boehner and Reid all expressed cautious optimism about the talks, but after overnight talks Reid and Boehner both said Thursday they were much less hopeful that a compromise would be achieved in time to keep the government open for business after the current CR expires tomorrow.

If efforts at a compromise fail, 800,000 government workers could be furloughed and countless organizations and agencies that rely on the federal government could find the doors shut and locked.

If a shutdown happens, nonprofit organizations that depend on federal funds could face delays in government reimbursements and lack of access to capital keeping day-to-day operations running. Some organizations may have enough cash on hand to continue operating, but if a government shutdown dragged on for weeks it could obviously have more severe repercussions.

Federal agencies are still working out contingency plans and determining what functions are “essential,” but there are likely to be some social services that can’t run during a shutdown. Nonprofits that typically fill in the gaps for needy populations could potentially find themselves facing increased needs, even as their access to capital dries up. It’s not a pretty picture.

Check back later for updates on how today’s meetings go.

What contingency plans do you have in place if the government shuts down tomorrow? Are you looking for alternative sources of capital? What are you hearing from your federal contacts about services you will or won’t have access to?

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