Daily Tax Update - September 30, 2013: Partial Government Shutdown Looms

Partial Government Shutdown Looms:  Unless a last minute deal is reached tonight, the government faces a partial shutdown at midnight.  Both parties blame the other for the impasse.

Earlier today, House Speaker John Boehner said, “The House has done its work.”  Boehner added, “It's time for the Senate to listen to the American people just like the House has listened to the American people and to pass a one-year delay of ObamaCare and a permanent repeal of the medical device tax.”  Yesterday, the House passed a bill that would maintain sequester-level funding of all federal operations for several weeks, delay the health law for a year and repeal a tax on medical devices.

This afternoon, the Senate voted 54-46 to strike the language from a House funding bill that delayed the Affordable Care Act by one year and repealed the medical device tax.

One potential compromise to avert the shutdown would be for Congress to pass a one or two-week continuing resolution that includes repeal of the medical device tax.  However, Senate Majority Leader Harry Reid rejected the idea of a one- week funding measure.  Reid said, “The Senate’s bill is a short-term extension.  That’s what it is.”  The Senate bill extends funding until November 15.  Reid added, “If we can’t pass this, we’re only truly entering a banana republic mindset.”

President Obama said late this afternoon that he was not “resigned" to a shutdown and said that he planned to talk to congressional leaders but offered no new compromise.  President Obama warned House Republicans that they would be engaged in the "height of irresponsibility" if they failed to pass a funding bill.  The President said, “One faction of one party, in one house of Congress, in one branch of government, doesn't get to shut down the entire government just to refight an election."  Obama added, “All of us will be hurt greatly should Congress choose to shut the people's government down." Obama said that a shutdown "doesn't have to happen."   The President added, “My hope and expectation is that in the 11th hour once again that Congress will choose to do the right thing.