Sun Rise Behind U.S. Capitol

The early morning sun rises behind the U.S. Capitol building. (Mark Wilson / Getty Images / September 20, 2013)

HARTFORD — Spurred by the threat that a congressional showdown over Obamacare will shut down the federal government, Gov. Dannel P. Malloy's budget director asked heads of state agencies Tuesday for contingency plans by Oct. 1 on how to maintain federally funded services to the public.

Budget chief Benjamin Barnes said in the memo that at Malloy's request, his staff was "undertaking to work with Connecticut state agencies to plan for the potential of a federal shutdown or default in the coming months."

"In the aftermath of the Great Recession, our state's economy — like that of the other states — has seen steady recovery," Barnes wrote. "Unfortunately, the governor and I are both deeply concerned that the United States Congress, particularly the House, may take reckless actions in the coming weeks that will undermine the improvement that we have seen, and threaten our fiscal condition in the months to come."

The memo was immediately blasted by state Senate Minority Leader John McKinney as a "political document."

McKinney, who is seeking his party's gubernatorial nomination to run against Malloy next year, said that the memo was "filled with erroneous information" and "intended to scare people of the state of Connecticut, and … to influence the debate over what's happening down in Washington."

"For example, he says our state's economy has seen a steady recovery. Well, it hasn't," McKinney said. "Connecticut was the only state to see its economy shrink in 2012."

President Barack Obama said in his weekly address on Saturday that a federal government shutdown could result from Congress' failing to pass a new budget by next Monday, the end of the federal fiscal year. Some, such as U.S. Rep. Jim Himes, D-4thDistrict, say they expect a government shutdown to happen.

The Republican-controlled House is refusing to extend federal government funding past next Monday without first de-funding the Affordable Care Act, popularly known as Obamacare. The Democrat-controlled U.S. Senate and Obama are not expected to go along with that, and no resolution to the impasse is in sight.

A preliminary vote on a proposal by U.S. Sen. Ted Cruz, R-Texas, to defund the Affordable Care Act is expected in the Senate on Wednesday.

McKinney said that Malloy and Barnes, rather than making "partisan accusations" about Republicans in Washington, should be urging Obama to make some compromise that would address legitimate concerns about Obamacare. "Businesses and people all across Connecticut are afraid of what is going to happen when Obamacare takes effect," he said, adding that something should be done to either "correct or repeal" the program.

However, Brendan Sharkey, the Hamden Democrat who is speaker of the state House of Representatives, issued a statement saying: "Washington Republicans are playing chicken with our economy. It is time for them to start acting like adults or the results could be disastrous across the country."

Donald Williams, D-Brooklyn, the president pro tempore of the state Senate, added that "a federal shutdown will hurt Connecticut's economy and resources for seniors, education and transportation. We can only hope that reason will triumph over extremism in Washington for the sake of our state and the nation."

Barnes, in his memo, told state agency commissioners and directors that "in the event that the federal government fails to reach an agreement to avoid a shutdown or default, there could be a significant impact on both your operations (especially staff and programs that rely on federal funding), and on the overall economy."

The "most significant" effect could be on the state's Medicaid program, which relies on federal funds to assist poor people, Barnes wrote. "The state's exposure may include responsibility for paying the salaries of state employees working on federally funded programs, covering the federal share of entitlement programs such as Medicaid, and potentially entering into short-term cash flow borrowing if revenues and/or federal reimbursements significantly lag state outlays."

"Accordingly," Barnes told the agency heads, "please provide, by October 1st, a written assessment of the potential impact on your agency's programs and operations as well as recommended steps for mitigating any risks."

"It does no good for anybody to have the federal government paralyzed and not functioning," said Sharon Langer, senior policy fellow at Connecticut Voices for Children, a nonprofit organization that advocates on behalf of low-income children and their families who benefit from federally financed programs such as Medicaid.

But Langer said it was her understanding that even in event of a federal shutdown, programs such as Social Security, Medicaid and Medicare "would continue" and "the money would still be there" for some time. "When we've had government shutdowns" in the past, she said, "the longest they lasted was a few weeks."