For Minnesota, a shutdown could have major implications

WASHINGTON – If Congress fails to head off a federal shutdown by late Friday, thousands of Minnesotans will be thrown out of work and government offices and national parks will be shuttered.

The House passed a short-term spending bill Thursday night that would keep the government funded for another month. But its prospects were shakier in the Senate, as Democrats railed against provisions left out of the bill and left unfinished by Congress last year, including immigration, disaster aid and funding for community clinics.

Newly appointed Sen. Tina Smith arrived in Washington just in time to watch the government teeter on the brink of shutdown.

"There is no reason we should be facing a government shutdown," she wrote on Facebook. "I've only been here two weeks and I'm already frustrated that Congress is kicking the can down the road instead of enacting an actual budget."

The last federal shutdown, back in 2013, shuttered national parks, sent more than 800,000 federal workers home without paychecks and disrupted federal benefits for weeks. The 16-day shutdown cost the economy an estimated $24 billion.

In Minnesota, 18,000 federal employees were furloughed — including 1,207 of the Minnesota National Guard's civilian technicians. Social Security and other government offices shut their doors. Hunters were barred from federal lands and schools canceled field trips.

"I don't think the Republicans in the House are going to shut down the government," Minnesota Republican Rep. Jason Lewis said Thursday afternoon in the Capitol, where he was sporting a Vikings jersey. "And then we'll see if Senate Democrats will shut down the government over DACA amnesty or anything else."

Minnesota Democrats hit back. Congress ended the year with several massive 2018 spending bills unfinished, with no funding for community clinics and children's health insurance, and with hundreds of thousands of young adults facing deportation unless the government takes action on the Deferred Action on Childhood Arrivals program. Democrats suggested that the majority should have spent the last months of 2017 focusing on those issues, rather than their tax cut bill.

"The federal government's fiscal year started October 1 of last year. But instead of fulfilling their responsibility to fund our government, President Trump and Republicans spent months working to pass their tax scam," said Minnesota Rep. Betty McCollum, speaking on the House floor before the vote. "Now, because they didn't do their jobs, Republicans are asking us to vote to kick the can down the road again. That is no way to run a government."

The House bill included some attractive provisions for Minnesota, including enough money to keep the Children's Health Insurance Program — which serves more than 125,000 Minnesota children and lapsed last fall — running for the next six years. The House bill also included a two-year moratorium on an Obama-era tax on medical devices.

"There is nothing in the continuing resolution that anyone should have voted against," said Minnesota Republican Rep. Erik Paulsen, who hopes Congress will move quickly to protect DACA recipients, including 6,000 in Minnesota. "Certainly there were things that were not included. But you find out what those things are and move on them constructively. Hopefully, we will have DACA as part of the next step."

Minnesota Rep. Collin Peterson was one of six Democrats who voted in favor of the House bill, which passed 230-197. Minnesota's other four House Democrats voted against it.

"This month-to-month continuing resolution cycle needs to end," Rep. Tim Walz said in a statement. after the House passed its fourth continuing resolution of the new fiscal year. "Providing certainty for our service members, our veterans, our farmers and our middle-class families requires long-term funding and there is no excuse for Congress and the White House's inability to get it done."

With the shutdown deadline looming, some were still hoping for a bipartisan fix.

"We've done bigger things in quicker time," Minnesota Democratic Sen. Amy Klobuchar said. "Right now, our major focus is on getting DACA and [the Children's Health Insurance Program] and disaster relief and community health centers. We have a lot to do here."

A shutdown could be risky for incumbents like Lewis — a freshman Republican in a potential swing district.

"I certainly think even if the Democrats shut down the government that we would get the blame," he said. "It's why they shouldn't shut the government down in the other chamber ... I'm not certain how anybody votes no on this, to be honest with you."

Asked if he was worried about a shutdown backlash against himself and other politically vulnerable Republicans, Lewis noted that he had voted for CHIP several times already: "I don't think we should shut down the government, and we're working hard not to."

A shutdown would throw Minnesota's massive medical technology industry into turmoil. It would force hundreds of companies to collect and pay an excise tax on medical device sales that was suspended for 2016 and 2017 and was slated for continued suspension in 2018 and 2019 in the House version of the continuing funding resolution.

Congressional delays in dealing with the device tax already had one of Minnesota's critical economic engines expending manpower and money reviving or creating systems to collect and pay the tax whose first payment is due Jan. 29.

The first two-year suspension of the tax, which was created in 2010 and collected from 2013-15, was supposed to give the House and Senate time to work out differences on the levy that helped for the Affordable Care Act.

"I advised our members that the tax was not going to come back," said Shaye Mandle, CEO of Medical Alley, Minnesota's med tech trade group. "When the [first] suspension came, companies started to invest and hire. Now, there are companies saying, 'Whoa, I'm going to have to pull back.' "

While the device tax has drawn bipartisan opposition, Mandle said "other things," such as the deportation of immigrant children brought to the U.S. illegally by their parents, is now "derailing" its suspension or repeal.

The medical technology sector is "watching a new political administration and process operating," Mandle said. "The last year with this administration is different than how the world worked in the past. It is different in what we can expect."

Jennifer Brooks • 202-662-7452