Home Capital Bureau

Impact of possible federal shutdown on Oregon unclear

In the current two-year state budget, Oregon expects to bring in about $21.8 billion in federal funds.

By Claire Withycombe

Published on January 19, 2018 4:27PM


Capital Bureau

SALEM — The looming partial shutdown of the federal government could cause a cash flow hiccup for the state of Oregon.

But the specific impact depends on the length of the shutdown, and how the federal government decides to implement it, says Legislative Fiscal Officer Ken Rocco.

In the event of a shutdown, which could interrupt the flow of federal funds, Oregon would get reimbursed after Congress passes a spending resolution, Rocco said on Friday morning, when the prospect of a shutdown was still unclear.

“Normally it’s just a cash flow issue for us,” Rocco said. “Most of these programs will only be held up briefly.”

In the current two-year state budget, Oregon expects to bring in about $21.8 billion in federal funds.

Central to the debate on Capitol Hill is a package to fund the Children’s Health Insurance Program, or CHIP.

CHIP covers children whose families make too much money to qualify for Medicaid, but still struggle to afford health insurance.

About 121,000 kids and 1,700 pregnant women in Oregon are covered by the program.

Congress blew past its Sept. 30 deadline to renew the program, but approved a short-term extension in December.

States will gradually run out of funding for the program — Oregon’s will last through the end of January, according to OHA.

The program was set to expire at 9 p.m. Pacific time on Jan. 19, unless the U.S. Senate votes to pass a bill that contains both a short-term spending plan and a six-year extension of CHIP.

Oregon. Gov. Kate Brown has said she wants the state to cover CHIP-eligible kids and pregnant women if Congress decides to do away with the program altogether — although that’s an unlikely prospect.

“If the feds do not continue the program and we decide to maintain it, that’s a state resource we’d have to apply to the program, but that’s totally speculative right now,” Rocco said.

The state hasn’t yet spent any extra state money on CHIP, but if Congress can’t reach a deal, the state would seek more money from the federal government on a monthly basis until federal funding runs out in the spring, according to OHA.

CHIP pays 97 percent of the total costs of health care for the kids on the program; but if Congress doesn’t fund CHIP, the state would ask the federal government to cover those kids under Medicaid at a reduced match rate of 63 percent, which would cost the state more money.

The state would need to come up with roughly $8.75 million per month to make up the difference between match rates. In total, the program costs $29 million per month.

U.S. Rep. Greg Walden, R-Ore., who represents the state’s massive second district in southwestern and Eastern Oregon, has called on the Senate to pass the bill.

“The question before us today is, do you want to keep the government open, and the services provided, and six years of full funding for children’s health insurance and pregnant women, or will you vote against it?” Walden said in a speech on the floor of the House of Representatives Thursday, before the House voted to pass the bill. “It’s as simple as that. The rest is political rhetoric.”

But Democrats say the program has become a “bargaining chip” in the budget negotiations on Capitol Hill — that Republicans added the CHIP extension to the funding bill at the last minute, and leveraged the optics of children’s health programs to take a dig at Democrats who oppose the continuing resolution for other reasons.

U.S. Sen. Ron Wyden, D-Ore., said “these children became hostages to the Republican political agenda.”

“Colleagues, you’ve had months to act,” Wyden said on the Senate floor on Friday. “You’ve had almost a year. The program expired 111 days ago, the Finance Committee passed a bipartisan bill, but these kids and their families are still waiting. There is nothing aside from cynical political strategy forcing the Congress into this crisis we’re facing today.”

A shutdown could also have impacts on Oregonians who work for the federal government — the 16-day shutdown in 2013 required “non-essential” employees to take furlough days.

In the third quarter of 2017, about 29,222 Oregonians were employed by the federal government, according to the state employment department.



Marketplace

Share and Discuss

Guidelines

User Comments