Government faces shutdown with looming federal budget deadline
- Sep. 29, 2013
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The word flashes across television screens and newspaper headlines as the federal government nears its Oct. 1 deadline for the federal budget without a resolution in hand. Threats of government shutdown loom over the country before the day ends.
So what really is this “crisis?”
It’s politics, as usual.
Currently, Republicans control the House of Representatives while Democrats control the Senate and the White House. Divided, the government is caught in a stalemate.
“The larger thing to understand is that it’s a fight over how large [of a] government you want and how much spending services the government is going to do,” said Mark Joslyn, associate professor of political science with focuses on public opinion and American politics. “Republicans want to limit spending because they are worried about the debt and deficit and they don’t like large government. Democrats are on the opposite side of that. So one side will scream, ‘crisis’ but the other side will say, ‘It’s not so bad, we can still spend. It’s not such a big deal.’”
Each year the government has to pass 12 appropriations bills providing new budget plans for the various federal agencies. When new appropriation bills aren’t possible due to stalemate, Congress then has to pass continuing resolutions, which maintain the current level of funding for government agencies.
What is keeping Congress from passing a continuing resolution?
“Republicans, particularly in the House, have found it extraordinarily politically popular with their constituents to say they voted to repeal Obamacare,” political science Professor Burdett Loomis said. Loomis specializes in Congress and American politics as well as state legislatures and interest groups.
The House Republicans attached a condition to the continuing resolutions bill that would defund Obamacare. Democrats are refusing to accept such a resolution.
While both parties may be at fault for their obstinacy, Loomis points out that the Republicans are fighting what has already been passed into law in 2010.
“You can argue about it but we’ve had the policy debates and we are implementing it,” Loomis said. “Most of Obamacare is written into law so they can’t defund it. Most of Obamacare doesn’t require appropriations of money anyways. They [Republicans] are the ones that are forcing this crisis with ostensible desire to defund Obamacare because of their constituents.”
As a result, Congress is stuck in its negotiations, with the Senate and the House tossing each other’s version of the budget back and forth without arriving at a real policy conclusion.
“It’s really hard for the congressional leaders because they are under a lot of pressure to get things done,” Loomis said. “You keep negotiating, negotiating, negotiating, and only just to keep the government going. There’s nothing productive going on.”
While history has proven that Congress can negotiate when it comes down to the final minutes, there just may not be enough time to finalize the procedures before the Oct. 1 deadline. If time runs out the government will shut down.
The U.S. has experienced 17 government shutdowns since the 1970s, with the last one occurring in 1996 under President Bill Clinton. Government shutdown means “non-essential” government functions will cease as federal employees will be furloughed.
“Services just stop,” Joslyn said. “Things like military — necessary and important elements — will stay in function, but lots of government employees will just not get checks. They’ll shut down altogether.”
Based on previous shutdowns, people can expect many basic services to stop. Museums and national parks will close; the U.S. will stop granting visas and passports; many regulatory agencies, such as those regarding the environment and finances, will shut down and stop taking on new cases.
Essential government functions concerning national security and protection of life and property, as well as most entitlement programs won’t be affected.
Only when the government passes a budget bill will the government shutdown end.
The budget ceiling, the real crisis
Assuming Congress will resolve the shutdown, a bigger problem lies ahead, and that is the debt ceiling, which limits how much the government can borrow.
With increasing national debt, Congress has to agree whether to raise the debt ceiling or let the government default on its loans.
“If the debt ceiling is not increased, if Congress can’t agree on doing that, then that will be extraordinarily serious,” Loomis said. “It means the United States won’t be able to pay all of its obligations, and so people around the world would look at us and say, ‘you are not able to pay your debts,’ even though we are perfectly capable if we raise the debt ceiling, and that could set off much larger repercussions.”
Immediately, stock market values would go down and interest rates would rise, meaning investments would lose value significantly. The country has experienced shutdowns before and has been able to overcome it, despite inconveniences. However, the U.S. has never defaulted on its loans before, and the situation could prove disastrous to the economy on several levels.
What led to this?
Due to the structure of Congress, all issues that are even slightly conflictual will be magnified. After Republicans captured the majority in the House of Representatives, the debate over the debt ceiling has become increasingly political.
“It’s only been the last three or four years they have really taken the debt ceiling hostage because previously, almost everybody agreed it had to be raised,” Loomis said. “Now you’ve got 70 or 80 Republican Tea Party folks who simply don’t agree with that.”
Tea Party members ardently against increased government spending have used the debt ceiling as leverage to get political victories, like the sequestration in 2011, which implemented federal budget cuts across the board.
Will this be resolved?
The pressure from the public will force one side to yield.
“I think Republicans will reconcile and the president will make changes. They won’t defund the whole program,” Joslyn said. “The last time the government shut down, it was a many time ago and Republicans tended to receive more of the blame from voters and congressional representatives. If the government shuts down, they don’t want to receive the blame and in the next election cycle, get kicked out of office.”
Congress has always been able to reach some sort of an agreement, and even if the government experiences a temporary shutdown, the budget ceiling must be raised, Loomis said.
“Government shutdown, really, that’s modest, but the idea of not raising the debt ceiling is truly horrific,” Loomis said. “It’s a really serious thing. We should actually engage in a policy where we don’t have to have a debate over this. It should essentially be automatic because if you [don’t] raise it, the damage it causes would be so great.”