After weeks of debate, Congress failed to pass a spending bill by Oct. 1, the start of the government’s fiscal year. Thus on Tuesday a government shutdown occurred, meaning many government agencies have closed down until a spending bill is passed.
The point of contention in Congress is the Affordable Care Act (ACA, colloquially known as Obamacare), passed by Congress in 2010 and upheld by the Supreme Court in 2012. House Republicans have demanded that any spending bill include provision to defund the ACA. Senate Democrats, led by Sen. Harry Reid, D-NV, have decided to oppose any bill that attempts to defund the ACA.
The effects of the shutdown are far-reaching: more than 1.3 million federal workers will continue to work, yet have their paychecks delayed until a spending bill is passed; 800,000 federal workers have had their jobs furloughed, meaning they will not work until a spending bill is passed, and they will only receive back pay if Congress decides they should.
As a result of the shutdown, all national parks have been closed. National parks are popular tourist attractions, and the National Parks Conservation Association estimates that local communities could lose up to $30 million each day that the parks remain closed. The Center for Disease Control (CDC) and the Food and Drug Administration (FDA) will both cease most of their activities.
The critical bargaining chip in the debate is the debt ceiling, which the Department of the Treasury defines as “the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations.” These obligations include the national debt. The House Republicans demand that unless spending for the ACA is cut, they will not pass a budget that raises the debt ceiling.
This could have dire consequences for the U.S. economy. According to a report published by the Treasury, if the debt ceiling is not raised by Oct. 17, the U.S. may potentially default on its debt. According to the same report, “A default would be unprecedented and has the potential to be catastrophic: credit markets may freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”
President Obama was deeply involved in the passing of the ACA, making it one of the key issues of his reelection campaign. The president has rejected the notion of defunding the program. In a speech on Tuesday, he said “As long as I am president, I will not give in to reckless demands by some in the Republican Party to deny affordable health insurance to millions of hard-working Americans.”
President Obama’s assertion that the shutdown was engineered by a small faction in the Republican Party has been corroborated by many observers.
The New York Times reports that although Speaker of the House John Boehner, R-Ohio, wishes to compromise on the budget, a “hard-core group of about two dozen or so of the most conservative House members” stand in his way. For these representatives, the ACA absolutely cannot go into effect. Rep. Jeff Duncan, R-SC, said “I feel Obamacare is shutting down America.” Rep. Raúl Labrador, R-Idaho, expressed confidence that the ACA can be shut down.
So far, only one of Labrador’s predictions has proven true: the public is angry at Republicans over the shutdown. A poll released Monday by Quinnipiac Polling Institute reported that 72 percent of Americans oppose Congress shutting down the government over the ACA. The same poll said that 74 percent of Americans disapprove of the actions of Congressional Republicans.
On Thursday, the shutdown entered its third day, and Senate Democrats showed no signs of relenting. The New York Times reports that since public opinion turned against Republicans over the shutdown, the House has tried to pass partial spending bills aimed at funding popular government programs such as national parks.
The Senate has rejected each of these bills, and Senate democrats have said they will only approve full government funding. Speaking to the Times about Sen. Reid’s unrelenting stance, Sen. Charles Schumer, D-NY, said, “From the first time we talked about this, he [Reid] said ‘We are not giving in.’ He had an instinctive understanding that this would work as long as Democrats didn’t fall for the bait. We haven’t, and we won’t.”
The debate in Congress has been intense. On Tuesday, Reid’s office leaked emails from John Boehner. In the emails, Boehner seeks to maintain subsidies for Congressional health insurance. This after making a speech on the House floor Monday, in which Boehner argued that such subsidies should be stopped. The leak of these emails demonstrates just how serious the fighting in Congress is.
As Sen. Dick Durbin, D-Ill., explained to NPR: “It’s an indication of things breaking down, in this dire situation we find ourselves, where what used to be kind of common sense and just normal relationship between professionals falls apart when you get into these political confrontations.”
The government shutdown represents a serious failure on the part of Congress. A CNN/ORC poll released Monday reports that Congress’ approval rating is at a mere 10 percent. The public is clearly displeased with the state of affairs on Capitol Hill.
The far-right faction within the Republican Party is to blame. Regardless of one’s views on the ACA, it passed through both the House and the Senate, and was ruled constitutional by the Supreme Court. It has met the legal requirements to pass into law, yet a vocal group within the House will stop at nothing to see it destroyed.
What is truly distressing, however, is how far congressmen like Reps. Labrador and Grim will go. By using the debt ceiling as a bargaining tool, they risk severe damage to the U.S. economy. Even if the U.S. does not default, there will be consequences. The mere threat of Congress not raising the debt ceiling is enough to break consumer confidence.
The last time Congress debated whether or not to raise the debt ceiling in 2011, the stock market fell 17 percent. In addition, credit ratings agency Standard & Poor’s lowered America’s credit rating, dropping it from the agency’s list of risk-free borrowers. On Friday, Bloomberg reported that the value of the dollar had fallen for the fifth week in a row.
For congressmen to force a government shutdown over a law that has passed every possible requirement is childish. For these same congressmen to gamble the United States’ credit rating (and in doing so risk a national or even global financial crisis) is nothing short of insane.
