There are three main components of the new law passed by Congress late on October 16, 2013. (1) a Continuing Resolution extending short-term government funding at FY 13 levels, with certain exceptions; (2) a temporary debt ceiling lift; and (3) the start-up of a FY 2014 budget conference. The first two fixtures largely kick the can down the road for several months. The start-up of the budget conference is a promising development, though fraught with uncertainty. Here are the details:
Continuing Resolution (CR). The CR extends FY 2014 government funding through Jan. 15, 2014 at FY 2013 levels. This means "flat-line funding," for most federal agencies, a troublesome development, especially if funding remains frozen for the remainder of the fiscal year. This will continue the uncertainty for government budget officers about spending, and what final level Congress ultimately will approve once the budget and appropriations numbers are established later this year. Continued flat-line funding for many federal agencies, especially DOD, for the remainder of the year, past January 15, would be difficult, and could lead to furloughs.
Retroactive pay for shutdown-furloughed federal employees also is authorized by the legislation. Payments of retroactive pay should be made during the next one or two payroll periods. Employees paid by the Defense Finance and Accounting Service - civilian employees at the Defense Department, Veterans Affairs and some other agencies - will receive back pay in their next check on our around Oct. 25.
2014 Pay Increase. Last night's agreement did not settle the question of whether there will be a 1% pay increase on January 1, 2014. The President has approved the pay increase but Congress has until December 31, 2013 to stop the increase.
Debt Ceiling. The debt limit is extended to Feb. 7, 2014, with the Treasury Department maintaining its ability to use so-called "extraordinary measures" to extend the deadline. One of these extraordinary measures in the past has involved temporarily refraining from paying interest on treasury securities within the Thrift Savings Program, ultimately paying the interest and holding TSP account holders harmless after the lifting of the debt ceiling.
Budget Conference. A House-Senate budget conference will meet to reach a recommended FY 2014 budget resolution by Dec. 13 on FY 2014 spending. This will be the first time in nearly a decade that the House and Senate will sit down in conference, under "regular order," the way things are supposed to work legislatively, to negotiate a budget resolution that sets the top-line federal spending number and appropriations account numbers.
The outcome of the budget conference could have potentially adverse consequences for federal employees: through additional retirement contributions, thereby reducing net pay; and using the chained-CPI to measure inflation, negatively affecting federal retiree and other COLAs.
FPA will be writing to those agencies employing federal physicians to ask what level of funding is needed to avoid furloughs in FY 2014.