US government starts to shut down agencies A hard-core conservative faction of the Republican Party refused to agree to a budget that did not include a repeal or delay of Obamacare. In shutting down the government, these Republican members of Congress again demonstrated that they are motivated by ideology, uninterested in striking compromises and unafraid to bring the government to a standstill if they feel it serves their political goals. The passage of a federal budget is not directly related to Obamacare, but rank-and-file Republicans in Congress appear to believe that their symbolic stand over Obamacare is politically advantageous as they seek to raise funds for re-election or ensure that they are not challenged from the right in their next election. The shutdown could last for as little as one day or as long as several weeks. The longer the shutdown goes on, the greater the inconvenience to the public, the bigger the economic impact and the more unpopular members of Congress will become. The shape of the solution will be determined by which side the public decides to blame. Polls carried out before the shutdown indicated that the public seemed to be pointing the finger at the Republicans more than the Democrats. The Economist Intelligence Unit believes that the most likely outcome is that some Republicans will eventually relent and pass a continuing resolution. The Democrats will claim victory, but this would obscure the earlier and bigger victory secured by the Republicans. The continuing resolution would lock in the lower level of spending from the sequester--a series of across-the-board spending cuts that took effect on March 1st-- which Democrats had wanted to reverse. So, while the Democrats currently look favourites to win the shutdown battle, the Republicans have already won the war on the overall level of government spending. So long as it is short lived, the impact of a shutdown on the economy would be relatively small. Government benefits would be paid, most federal employees would continue to work, and the implementation of Obamacare would be unaffected. Of much greater concern is the next potential fiscal emergency on October 17th, when Congress must raise the debt ceiling.
Posted on: Sat, 05 Oct 2013 00:02:05 +0000
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