This week’s policy update provides the latest on the ongoing federal government shutdown and seeks your input on the impact that the shutdown is having (or not having) on your nonprofit. We also share details of the state legislature’s plans to redraw North Carolina’s congressional districts and on other potential priorities for the NC General Assembly’s mini-session next week. |
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Federal Government Shutdown Continues |
Today marks the 17th day of the federal government shutdown as Congress and the White House remain unable to reach an agreement on appropriations legislation for the current federal fiscal year. Last month, the U.S. House of Representatives approved a “clean” continuing resolution (H.R. 5371) that would extend federal funding through November 21. The bill needs 60 votes to pass the Senate. The Senate has rejected the bill 10 times in the past three weeks.
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Yesterday, Senate leadership attempted a different approach to funding the federal government by attempting to schedule a vote on a bill to fund the Defense Department for the full fiscal year (one of 12 appropriations bills that Congress would need to pass to fund the federal government). The defense appropriations bill would ensure that members of the military continue to be paid during the government shutdown, although the White House and Defense Department said that they had temporarily shifted other defense funding to cover military pay on October 15, the first payday of the fiscal year for members of the military. The Senate voted against taking up the defense appropriations bill yesterday, with most Democrats voting against the bill since it would not include funding for other federal programs.
Most Senate Democrats oppose the temporary spending bill or a partial spending bill for two reasons: |
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Without congressional action, the enhanced premium tax credits on their Affordable Care Act (ACA) Marketplace health plans are scheduled to end after this year. Translation: The cost of ACA Marketplace health coverage will increase significantly for many North Carolinians in 2026, including for many people who are clients of nonprofits and employees of nonprofits that do not offer employer-provided health coverage. Some congressional leaders have indicated that Congress could consider extending the enhanced tax credits in December. Democrats have expressed concerns that this will be too late since open enrollment for ACA Marketplace plans opens on November 1.
- President Trump has twice this year used rescissions to cancel billions of dollars of congressionally-approved funding. Democrats want future appropriations legislation to include assurances that President Trump will not have the authority to rescind other funding approved by Congress.
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This week, the White House indicated that it plans to divert revenue from tariffs to provide funding for the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) program, which was one of the first major federal safety net programs that was likely to stop due to the government shutdown.
A prolonged government shutdown could lead to lapses in service for many people served by nonprofits and for delayed or cancelled payments to nonprofits that provide services through federal grants and contracts. Let us know if your nonprofit has been affected by the federal government shutdown and/or if you anticipate that a prolonged shutdown could affect your nonprofit or the people you serve.
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Legislative Oversight Committee Questions Medicaid Rate Cuts |
On Tuesday, a legislative oversight committee held a meeting to discuss recent cuts to the rates that the NC Department of Health and Human Services (DHHS) pays to providers, including many nonprofits. On October 1, DHHS implemented: (1) a 3% rate reduction for providers of most services to Medicaid recipients; (2) a 10% rate reduction for acute care hospitals, nursing homes, psychiatric residential treatment facilities, and research-based Behavioral Health Therapy/Applied Behavior Analysis services for people with autism; and (3) an 8% rate reduction for intermediate care facilities. The cuts came after the NC Senate and NC House of Representatives were unable to agree on legislation to fully fund Medicaid for the current fiscal year. During the oversight committee hearing, legislators questioned whether DHHS had fully considered other options before implementing the rate cuts, and DHHS responded with explanations for why cuts to DHHS administrative expenses would have been harmful to Medicaid recipients and providers.
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| NC General Assembly Returns to Raleigh Next Week to Vote on Congressional Redistricting |
The NC General Assembly will return to Raleigh next Monday-Thursday for a mini-session to redraw North Carolina’s congressional districts for the 2026 election. Specifically, legislative leaders have indicated they plan to vote on a new congressional redistricting plan that would shift the partisan makeup of the 1st Congressional District (which covers much of the northeastern part of the state), following similar redistricting plans in other states. |
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Under the new plan, North Carolina would likely be represented by 11 Republicans and three Democrats in the U.S. House of Representatives beginning in 2027. The Senate Election committee is scheduled to meet on Monday to review the new proposed redistricting plan. The committee has posted the proposed new congressional map and demographic and election history data for the proposed new congressional districts.
Lawmakers also could vote on legislation to provide full funding for Medicaid rebase (to roll back recent cuts in reimbursement rates for Medicaid providers) and on overrides of several bills that Governor Stein has vetoed.
The General Assembly has scheduled additional mini-sessions for each month this fall and winter: |
- November 17-20
- December 15-18
- January 12-15
- February 9-12
- March 9-12
- April 6-9
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Lawmakers will then begin the 2026 short session on Tuesday, April 21, 2026. |
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New Audit Finds Delays in SNAP Payments in Some NC Counties |
On Wednesday, the NC State Auditor released a report on a performance audit that found significant delays in Supplemental Nutrition Assistance Program (SNAP) payments to families in seven counties receiving federal food assistance. The report found that, between 2022 and 2024, 91% of SNAP payments in North Carolina were made in a timely manner. However, between 14%-25% of SNAP recipients in seven counties – Davidson, Edgecombe, Wake, Mecklenburg, Pitt, Cumberland, and Stanly – received their SNAP benefits late. The report estimates that, in total, $83 million in SNAP payments were delayed to North Carolina families between 2022 and 2024.
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White House Could Propose Additional Rescissions Today |
President Trump has indicated that he may soon announce a plan to rescind more funding approved by Congress as the federal government remains shut down. Under federal law, Congress must approve any rescission request by a majority vote of both the U.S. Senate and the U.S. House of Representatives within 45 days of receiving the request from the President. President Trump has not indicated which federal programs he is seeking to defund. Earlier this year, he rescinded federal funding for a variety of foreign aid and education programs as well as funding for the Corporation for Public Broadcasting (CPB), which is a major revenue source for the Public Broadcasting Service (PBS) and National Public Radio (NPR), two of America’s largest and most prominent nonprofit news outlets, and their local affiliates.
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Third Quarter Lobbying Reports Due by October 21 |
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