Last year, the widening partisan split over the Affordable Care Act produced the first federal government shutdown in 17 years. Almost one year later, Virginia's state government is on a collision course that could cause that state's first-ever shutdown.

Like the federal shutdown, the law known as Obamacare is to blame for the bickering in Virginia, which has become a national political bellwether.

Virginia's Democrats, led by freshman Gov. Terry McAuliffe, and Republicans have engaged in an increasingly partisan and nasty fight over the past few months over an expansion of the federal Medicaid program under the Affordable Care Act. The dispute has come to a head because Virginia must pass a budget by July 1 to avoid a shutdown.

McAuliffe and the state Senate, which up until this week was narrowly controlled by Democrats, have bickered with the Republican-controlled House of Delegates in Virginia over the expansion, which the governor says could expand coverage to as many as 400,000 Virginians.

But late Sunday, Virginia Republicans effectively teamed up with one Senate Democrat and threw the debate for a loop. State Sen. Phillip Puckett is set to resign on Monday, a move that led some Democrats to accuse Republicans of "buying" Senate control.

Puckett's resignation leads the way for him to get a job as deputy director of the state tobacco commission and for his daughter to be confirmed for a state judgeship. Depending on how you look at it, it's politics at its worst — or best.



"Republicans I've talked to are chortling," Larry Sabato, founder and director of the University of Virginia Center for Politics, told Business Insider. "They think it's one of the cleverest things they've done."

"And yet," he added, "one of them asked me, 'Do you think Democrats would not have done the same thing if they had the opportunity?' And of course they would have. It's yet another reason people hate politicians."

The developments give Republicans 20-19 majority in the state Senate, meaning they now hold the upper hand in the budget battle and the Medicaid fight.



All of this maneuvering comes back to Obamacare. Republicans will now control both the House of Delegates and the Senate, and McAuliffe may be backed into a corner.

The Affordable Care Act provides resources for states to expand Medicaid after a landmark Supreme Court decision in 2012 said states could decide on expansion for themselves. So far, 26 states and the District of Columbia have expanded Medicaid to cover people below 133% of the poverty line — about $15,500 in annual income for an individual and about $31,700 for a family of four. Virginia is one of a handful of states still actively debating whether to expand the program.

McAuliffe campaigned on a promise to expand Medicaid, which had been resisted by then-Republican Gov. Bob McDonnell. However, Republicans have nearly a two-thirds majority in the House of Delegates. And, as Sabato explained, the only way most of them can lose is through a Republican primary in which they are not viewed as conservative enough.

Phillip Puckett AP "This is really about Obamacare," Sabato said of the dispute. "Forget about Medicaid."

What happens now? There are three immediately foreseeable solutions. The first, as McAuliffe contended is still possible Sunday night, is the Senate still passes a budget funding Medicaid expansion. Three moderate Republicans have expressed support for the expansion, but "they can be persuaded," Sabato said. The new developments, meanwhile, have energized the party as a whole.

If the Senate does manage to pass a budget with the Medicaid funding, it would mean a standoff between Republicans in the House and Senate Democrats, with McAuliffe backing Democrats.

Another potential outcome is that Republicans, emboldened and unified by the power play, could refuse the expansion in both the House and Senate. It could leave McAuliffe with no choice but to blink, unless he is prepared to take on the uncertain political and legal future of a potential shutdown.

But McAuliffe has also been preparing for a potential third option. According to The Washington Post and confirmed by a source with knowledge of his deliberations, McAuliffe has looked into whether he has the ability to bypass the legislative process altogether and expand Medicaid by executive order. But whether he has the legal authority to do so is unclear, and it is clear the move would cause a political firestorm.

McAuliffe said only Sunday night that he was "disappointed" by Puckett's move, touting the fact three Republican senators have offered sentiments of support for the expansion.

"I am deeply disappointed by this news and the uncertainty it creates at a time when 400,000 Virginians are waiting for access to quality health care, especially those in Southwest Virginia," McAuliffe said in a statement.

"This situation is unacceptable," the statement read, "but the bipartisan majority in the Senate and I will continue to work hard to put Virginians first and find compromise on a budget that closes the coverage gap."