During the shutdown, the District used a $144 million reserve fund to keep all 32,000 city employees on the job and most city services running. However, the city was forced to halt a variety of payments, including a quarterly Metro subsidy payment, reimbursements to Medicaid contractors, and legal settlements and judgments.
Del. Eleanor Holmes Norton (D-D.C.) called it a “historic first” for Congress to provide the District spending authority that outstrips the whole of the federal government. “We must now make use of the damage done by moving on all fronts for full budget autonomy,” she said.
The D.C. spending language appeared in the bill circulated by Senate Majority Leader Harry M. Reid (D-Nev.) shortly before 6 p.m.
Hours earlier, Paul Strauss, the District’s elected “shadow” senator, said that, after talks with Senate leaders, he was optimistic that language granting the District year-long spending authority would appear in the bill after talks with Senate leadership.
“I’m told there would be some appreciation for our plight,” he said. “But I’m not popping champagne yet.”
The city raises roughly $6 billion in local funds to deliver basic services such as police, firefighting, trash pickup and schools. Under the District’s home-rule charter, its budget remains subject to congressional appropriation.
It does not appear that the budget deal will grant the city more lasting permission to spend its local funds.
In April, voters in the District approved a ballot measure amending the charter to allow those funds to be spent even without a congressional appropriation. But that measure does not take effect until Jan. 1, and it has been mired in legal debate with House Republicans. Even D.C. Attorney General Irvin B. Nathan has questioned its constitutionality.
In a report released in July, House Republicans characterized the referendum as merely the “expression of the opinion of the residents, only, and without any authority to change or alter the existing relationship between Federal appropriations and the District.”
Mayor Vincent C. Gray (D) and Norton have continued to press Congress to give the city more spending freedom.
Gray, in a statement released after the votes Wednesday night, thanked Democratic congressional leaders — and also House Republicans, including House Speaker John A. Boehner (Ohio) and Rep. Darrell Issa (Calif.).
“I’m relieved and thankful that we will not have to worry for the rest of the fiscal year about becoming collateral damage if, God forbid, the federal government is again forced to shut down,” Gray said.
A senior Republican aide privy to Senate negotiations said the deal ending the shutdown was not intended to make a broader statement about D.C. budget autonomy. The aide said that the full-year exemption for the District was similar to language used to break prior budget standoffs.
“If you go back and look at previous [continuing resolutions], you’ll see that’s fairly standard bill text,” the aide said.
A House Republican aide echoed that sentiment. “I wouldn’t read anything into it about District budget autonomy,” the aide said.
If Congress fails to reach a budget agreement by its new January deadline, the history of the winter of 1995-96 could repeat itself. Then, the city was subject to a five-day federal shutdown in November but was able to keep its government open throughout a longer shutdown that closed federal agencies over several weeks in December and January.
In the wake of Wednesday’s votes in Congress, D.C. government payments could be unfrozen quickly. David Umansky, a spokesman for Chief Financial Officer Natwar M. Gandhi, said that “payments would be paid the same or the next day” after President Obama signs the bill.
The inclusion of the D.C. spending language came after local leaders made unusually aggressive moves to protest the shutdown’s effect on the District’s government, including putting pressure on fellow Democrats.
Lori Montgomery and Ben Pershing contributed to this report.