Republicans in the House of Representatives passed a government funding bill early Sunday that would delay the nation's health care law for one year — inching federal agencies closer to a shutdown that analysts predict would damage Maryland's economy.
During a rare weekend session, GOP lawmakers advanced a series of bills to pay for government operations that would also put President Barack Obama's signature health care law on hold until 2015. The House was set to approve a separate bill to fund the military in the event of a shutdown.
The House legislation, coming days before Monday's deadline to fund the government or risk a shutdown, has no chance in the Democratic-controlled Senate, where leaders said they will not accept a funding bill that undercuts Obamacare.
The House vote was 231-192.
If lawmakers don't strike a deal, agencies will furlough workers and cut back on services Tuesday. The economic impact in Maryland will worsen with each passing day, experts said.
"The first day of a shutdown is a little like a snow day," said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. "If it spans five or six days, then it begins to have more consequences."
Because of its proximity to Washington and its high concentration of federal workers, Maryland would be hit harder by a shutdown than many other states, economists say. Thousands of federal workers who live in the state would be sent home without pay, and contractors would be left holding unpaid invoices.
Officials estimate that the state would lose about $5 million in revenue and $15 million in economic activity for each day of a shutdown. The estimates are based on the tens of thousands of federal employees who would be furloughed.
"I'm most concerned about the economic impact," Gov. Martin O'Malley, a Democrat, said in an interview. "The biggest damage is what it does to our consumer and business confidence throughout the country, but that's especially true in the nation's capital."
A shutdown would also affect Marylanders who don't work for the government: Federal parks, including Fort McHenry and Antietam National Battlefield, would close. Passport applications would be shelved. School field trips to Washington would be canceled.
"A shutdown is not an idle exercise," said Sen. Barbara A. Mikulski, a Maryland Democrat and the chairwoman of the Senate Appropriations Committee. "It's not only turning out the lights at the Washington Monument."
While the state and national economy weathered the last federal government shutdowns in 1995 and 1996, analysts say the U.S. economic picture was rosier then, with an unemployment rate under 6 percent. Congress had also approved funding for several agencies before those shutdowns, blunting the impact.
The Obama administration began detailing Friday the actions it would take if funding lapsed, including furloughs of more than 13,000 employees who work for the Bethesda-based National Institutes of Health and another 18,000 at the Social Security Administration, which is headquartered in Woodlawn.
It's not clear how many of the furloughs would affect workers in Maryland.
The state's military installations would not be immune. Uniformed personnel and "mission essential" employees would continue to work at Fort Meade, but most garrison services would be closed, said spokesman Chad Jones. Nationwide, 400,000 civilian Defense Department workers would be furloughed.
Maryland and Virginia would be hurt more by a shutdown for the same reason they experienced less economic pain during the recession: their ties to the federal government. Fuller said that impact comes at a precarious time for the economy.
After outpacing the nation for years, the economy of Washington and its suburbs in Maryland and Virginia has slowed. The region lost more than 26,000 jobs from July to August — though most of that loss was not in Maryland.
Furloughs and contractor cuts would come on top of large budget cuts approved this spring that Fuller said are just now starting to have an economic impact. He expects most businesses in the region may be waiting to hire new employees until this latest round of budget battles shakes out.
Saturday's action on Capitol Hill pushed the government closer to a shutdown — but did not make that outcome inevitable. House Republicans did not rule out the possibility of a separate, short-term funding bill to move Monday's deadline back a few weeks.
Lawmakers approved such legislation during a similar showdown in 2011, hours before agencies were set to close.
Washington has lurched from one budget crisis to another for most of the past three years after Republicans captured control of the House in 2010. Many of those GOP lawmakers were elected on platforms of repealing the Affordable Care Act and cutting the size of the federal government.
An estimated 180,000 Marylanders are expected to enroll in health coverage through a new insurance marketplace created under the law that will open for business on Tuesday.
The House effort on Saturday put the political onus back on Senate Democrats to either hold firm to their resistance to Obamacare alterations or to pass another funding bill.
"The American people don't want a government shutdown and they don't want Obamacare," House Speaker John Boehner said in a statement. "We will do our job and send this bill over, and then it's up to the Senate to pass it and stop a government shutdown."
Both parties have tried to set the other up to take the blame if the government shuts down.
"The House is taking action to keep the government running and protect the men and women in our military in case the Senate and president refuse to negotiate and shut down the government," said Rep. Andy Harris, Maryland's only GOP lawmaker in Congress.
Meanwhile, White House press secretary Jay Carney said in a statement, "Today Republicans in the House of Representatives moved to shut down the government. Any member of the Republican Party who votes for this bill is voting for a shutdown."
The debate left agencies, employees and contractors bracing for a shutdown.
Alan Chvotkin, executive vice president and counsel to the Professional Services Council, said contractors have been advised to continue performing work if the government shuts down unless specifically told not to.
"If we don't get [a deal] by Tuesday and it goes through the balance of that week, more and more contracts will be identified and more employees will be furloughed," said Chvotkin, whose group represents companies in Maryland and elsewhere.
"The longer it goes, the wider that wedge becomes," he added.
Maryland is home to a robust and growing federal contracting community. The Maryland Department of Business and Economic Development estimates the number of people who work for federal contractors at 171,000. The federal government awarded about $27 billion in contracts to Maryland businesses in the 2012 fiscal year.
The impact of a shutdown could also be felt in less expected ways. During the 1995 and 1996 closures, the American Red Cross warned of blood shortages, for instance. Federal offices are a major source of worksite blood donations.
And several Baltimore-area schools are carefully eyeing field trips planned to Washington next week.
The John Carroll School in Bel Air will host German high school exchange students for a tour of Washington on Oct. 5. Administrators fear the trip may be cut if the government buildings and museums are shuttered.
"There are a few places these students want to see when they come to the United States — one of those places is D.C., which they see as the core to our country," school spokeswoman Laura Lang said. "It's just a shame that every few months we get to this point."
Baltimore Sun Media Group reporters Krishana Davis and Matthew Hay Brown contributed to this report.
Past federal shutdowns
Budget battles in Washington have resulted in shutdowns or partial shutdowns three times since 1990.
October 1990: Congress rejected President Bush's spending plan, shutting down the government over the three-day Columbus Day weekend. Most federal workers were off anyway. An emergency spending bill cleared Congress before dawn Tuesday, and work resumed.
November 1995: An estimated 800,000 federal employees were furloughed during a five-day shutdown that resulted from President Clinton's veto of a stop-gap spending bill and debt limit extension. It ended with a one-month funding extension.
December 1995 to January 1996: The government shut down again a month later for 21 days — the longest in the nation's history. An estimated 284,000 employees were furloughed and another 475,000 worked without pay. The shutdown ended with a short-term spending bill.
Source: Congressional Research Service