By Narrelle
October 2013 was dominated by a political crisis in the United States that brought into focus the fierce divisions between our two political parties, the Democrats and the Republicans. On October 1, 2013, after weeks of partisan disagreement, the United States government shut down. The shutdown ended sixteen days later on October 16, without any disastrous outcomes, but the issues surrounding the shutdown remain controversial and unresolved and will continue to adversely affect our country for months to come.
Understanding the basis of the government shutdown requires a basic understanding of the allocation of federal funds for each fiscal year. At the beginning of each fiscal year, which begins on October 1, the United States Congress is constitutionally required to pass twelve appropriations bills dictating the allocation of federal funds to each government agency. After the President submits a budget request in February of each year, the House of Representatives and the Senate spend the next eight months formulating and debating the bills, until both houses vote on and pass each bill. If Congress cannot pass the bills before the beginning of the fiscal year, they merely pass continuing resolutions, which allow federal agencies to continue spending according to the previous year’s regulations until appropriations bills are passed. Over the past few decades, with the increase in bipartisan disagreement over the deficit, Congress has resorted to passing several continuing resolutions a year. Since the fiscal year (FY) 1975, there have been only four years during which all twelve appropriations bills were passed and signed into law by the President before the beginning of the next fiscal year: FY 1977, FY 1989, FY 1995, and FY 1997.[1]Most of the time, continuing resolutions are passed before October 1, allowing funding to continue until appropriations bills can be passed. The duration of these continuing resolutions vary greatly; some last only a few days, while others carry on for an entire fiscal year. When neither a continuing resolution nor appropriations bills are in effect, the government cannot allocate federal funding and shuts down.
At the beginning of FY 2013, a six-month continuing resolution was passed, allowing funding to continue until March 27, 2013.[2] However, Congress failed to pass the appropriations bills before the new deadline and instead enacted another continuing resolution, which allowed funding to continue until the end of the fiscal year, September 30, 2013. In September, Congress, again unable to pass all twelve appropriations bills before the deadline, began to debate another continuing resolution, which would continue federal appropriations until December 15, 2013. This continuing resolution, however, became subject to heated debate during the final weeks of September when the House of Representatives, which currently has a Republican majority, attached an amendment to the bill that would defund the Affordable Care Act, also known as ObamaCare. On September 20, 2013, the House of Representatives passed the bill and sent it to the Senate for approval. Seven days later, after removing the amendment defunding the Affordable Care Act, the Senate, which has a Democratic majority, passed the revised bill and sent it back to the House. In response, the House attached two amendments to the “clean” version of the bill the Senate sent them. The first amendment delayed the implementation of the Affordable Care Act for a year, while the other repealed a 2.3% tax on medical devices. On September 29, less than forty-eight hours before the deadline, the House sent the bill back to the Senate. The Senate again removed the amendments and sent the “clean” bill back to the House. This time, the House responded by attaching amendments to the bill that would delay the individual mandate portion of the Affordable Care Act, which requires individuals to have healthcare insurance, for a year and would end employer benefits for members of Congress and their staff. By this time, only a few hours remained before the deadline. The Senate chose not to act on the newest version of the bill they received, allowing the government to shut down.
Unfortunately, the disagreement over federal funding was not the only issue plaguing the United States fiscal affairs during October 2013. October 17 was another deadline: the day the debt ceiling was projected to be reached. Set by Congress, the debt ceiling, which was set at 16.7 billion, is the maximum amount of money the United States government can owe. Since March 1962, as the deficit has continued to increase with no balanced budget in sight, the United States has come close to hitting the debt ceiling seventy-seven times, but each time Congress has simply raised the debt ceiling to avoid the crisis. If Congress did not raise the debt ceiling and allowed it to be breached, the United States would default on its loans. This would mean that the government would be unable to spend any money other than its revenue, the amount of money it takes in. The government would only pay interest on its loans and would essentially have to pick which expenditures had the highest priority and needed to be paid, resulting in the indefinite suspension of countless government agencies. In 2011, Treasury Secretary Timothy Geithner compared the situation to a homeowner who continued to pay his mortgage, but was unable to pay his car loans, insurance premiums, credit debt, utilities, or any other bills.[3] Since the government has never defaulted, the lasting repercussions of breaching the debt ceiling are unknown and subject to speculation. However, most people agree that breaching the debt ceiling would damage the United States’ reputation and credibility, which would mean the government would essentially have bad credit, in much the same way that individuals who cannot pay their loans receive bad credit markings. For the United States, this could lead to increases in interest that would equal trillions of dollars, an amount that would significantly increase the deficit and worsen future economic crises. Whatever the far-reaching consequences, it is clear that breaching the debt ceiling would have a catastrophic impact on our economy and thus on the world economy.
Soon after the onset of the 2013 government shutdown, it became apparent that the debt ceiling and the shutdown would be interconnected. As federal agencies across the country shut down, Republicans and Democrats continued to argue over appropriations for FY 2014 and the issue of raising the debt ceiling. As the shutdown entered its second week, the Republican leaders, including Speaker of the House John Boehner, former vice-presidential nominee and Congressman Paul Ryan, Senator Ted Cruz, and Senate Minority Leader Mitch McConnell, began to appear divided and indecisive. This lack of a united front and a clear course of action weakened their position and diminished the chance of accomplishing their goal of defunding the Affordable Care Act, an action which, in their view, would have down-sized the role of federal government, repealed a flawed policy, and promoted greater fiscal responsibility. As the debt ceiling deadline loomed nearer, Senate Minority Leader Mitch McConnell and Majority Leader Harry Reid began negotiating on a deal that would end the shutdown and raise the debt ceiling. By October 14, they had reached an agreement. However, Speaker of the House John Boehner asked McConnell to delay the Senate vote on the agreement until he made a last-minute attempt to rally the House Republicans around legislation that would have ended the crises on their own terms. However, the legislation did not have full caucus support and Boehner and the other Republican leaders were forced to cede. With only hours before the country with the world’s largest economy defaulted on its loans, the Senate and the House overwhelmingly passed a “clean” continuing resolution that included only one minor concession to the Republicans, a measure that strengthened income verification laws on the healthcare exchanges. With no options left, Boehner voted in favor of the bill and later said in a radio interview, “We fought the good fight; we just didn’t win.” [4] The Continuing Appropriations Act, 2014, took effect just after midnight, when President Obama signed it, continuing federal funding until January 14, 2014, and suspending the debt ceiling until February 7, 2014.
Despite earnest efforts on their behalf to reach a balanced compromise with the Democrats, the shutdown is largely viewed as a major failure for the Republicans. In the aftermath the blame game that was played out in Washington D.C., polls overwhelmingly show that the Republicans have taken the blame for causing the shutdown. However, many people also blame the Democrats for refusing to work towards real solutions to our economic issues by refusing to negotiate with the Republicans, who tried a number of avenues of compromise and negotiation that were met only by stubborn silence. With congressional elections approaching in 2014, the shutdown could have a serious effect on the reelections of many congressmen, potentially changing the balance of the House. For now, however, it remains to be seen how the Republicans and Democrats will approach the same issues that remain unresolved in the wake of this political crisis in less than four months when they are faced with them once more. Still, many government leaders, including President Obama, have denied the possibility of another government shutdown, asserting that they will not wait until the eleventh hour again.
While the government shutdown was primarily a political conflict, it did have several effects on average American citizens. All non-essential federal government activity, excluding anything involving national security, stopped. (However, state and local government activities, including law enforcement and emergency workers, were unaffected.) With the cessation of all federal funding, nonessential federal employees were sent home without pay, and, with the exception of the congressmen, senators, the President, and members of the armed forces, even those who continued to work did not receive their salaries for the duration of the shutdown. Fortunately, however, Congress voted to give back pay to all furloughed employees after the shutdown ended. Though Republicans attempted to pass several bills allowing funding to resume for select agencies, including Federal Emergency Management Agency, the Department of Veteran Affairs, the National Institutes of Health, and national parks and museums, Democrats refused to support these measures, alleging that they would take away political pressure and blame from the Republicans. However, what was most affected by the cessation of government activity was tourism. Though Transport Security Administration workers and air traffic controllers were not affected by the government shutdown, tourists in Washington D.C. and across the nation were turned away from national parks, national monuments, and many museums. On the first day of the shutdown, a group of World War II veterans, along with members of Congress and former Alaskan Governor Sarah Palin, bypassed the barricades around the World War II Memorial and spent several hours at the memorial, attracting much media attention. During the second week of the shutdown, several states used their own funds to reopen their tourist attractions, including the Statue of Liberty, the Grand Canyon, and several other national parks, which they asserted would provide enough revenue from tourism to replace the funds spent on keeping them open until federal funding resumed. The region with the most concerns related to the government shutdown was Washington, D.C., the only region in the country that is not autonomously funded and partially relies on Congress for local government funds. As a result, previous government shutdowns resulted in the cessation of all government activity, including trash collection. To avoid this, the Mayor declared all government employees essential and ordered reserve funds to be used to continue city activity until the resumption of federal funding. However, the city was still significantly affected by the drops in tourism and the furloughs of federal employees who make up much of the city’s population. Nationwide, neither the postal service nor social security were affected, but the issuance of passports, gun permits, and federal housing loans ceased. The continuation of veteran benefits became a major concern as the shutdown entered its third week and the Department of Veteran Affairs ran out of reserve money, but fortunately the shutdown ended before they were adversely affected. Overall, experts estimate that the shutdown cost the national economy up to $26 billion.
The government shutdown dominated the news last month and certainly had many economic and political ramifications, but ultimately the showdown had little immediate effects on improving the economy, balancing the federal budget, or resolving any of the other issues that brought on the crisis. The shutdown, however, does represent a dangerous tendency in our leaders to abdicate responsibility, blame others for problems they caused, and use every moment for political gains. These actions will only create more problems, not resolve them, and will foster a caustic atmosphere of antagonism and egocentrism. Our leaders on both sides must step away from partisan politics and adversarial governing, and return to leading our nation by working together to solve the issues our nation faces, economically, socially, and internationally. Only then can America return to its goals of leading the free world into better days of peace and prosperity. Meanwhile, however, we can only hope that our leaders will be able to resolve our immediate issues before they can further damage our nation’s economy and threaten our people’s well-being.
[1] Tollestrop, Jessica. Duration of Continuing Resolutions in Recent Years. April 28, 2011. RL32473. Congressional Research Service Report. October 4, 2013. http://www.fas.org/sgp/crs/misc/RL32614.pdf
[2] Tollestrop, Jessica. FY2013 Continuing Resolution: Analysis of Components and Congressional Action. October 17, 2012. R42782. Congressional Research Service Report. October 4, 2013. http://www.fas.org/sgp/crs/misc/R42782.pdf
[3] Sahadi, Jeanne. “What Happens if Congress Blows the Debt Ceiling?” CNN Money. April 29, 2011. Cable News Network. October 20, 2013. http://money.cnn.com/2011/01/03/news/economy/debt_ceiling_faqs/index.htm
[4] “United States Federal Government Shutdown of 2013.” Wikipedia. October 22, 2013. Wikimedia Foundation, Inc. October 22, 2013. http://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_2013
Works Cited
Tollestrop, Jessica. Duration of Continuing Resolutions in Recent Years. April 28, 2011. RL32473. Congressional Research Service Report. October 4, 2013. http://www.fas.org/sgp/crs/misc/RL32614.pdf
Tollestrop, Jessica. FY2013 Continuing Resolution: Analysis of Components and Congressional Action. October 17th, 2012. R42782. Congressional Research Service Report. October 4, 2013. http://www.fas.org/sgp/crs/misc/R42782.pdf
Austin, D. Andrew. Levit, Mindy R. The Debt Limit: History and Recent Increases. October 15, 2013. RL31967. Congressional Research Service Report. October 20, 2013. http://www.fas.org/sgp/crs/misc/RL31967.pdf
Korte, Gregory. “66 Questions and Answers about the Government Shutdown.” USA Today. October 1, 2013. October 4, 2013. http://www.usatoday.com/story/news/politics/2013/09/29/questions-and-answers-about-the-shutdown/2888419/
Yan, Holly. “Government Shutdown: Get Up to Speed in Twenty Questions.” CNN Politics. October 1, 2013. October 4, 2013. http://www.cnn.com/2013/09/30/politics/government-shutdown-up-to-speed/index.html
Matthews, Dylan. “Everything You Need to Know about Why the Government Might Shut Down.” The Washington Post. September 18, 2013. October 4, 2013. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/18/everything-you-need-to-know-about-why-the-government-might-shut-down/?wprss=rss_economy&clsrd
“House Passes Full-Year Continuing Resolution, Preventing Government Shutdown.” Committee on Appropriations. March 21, 2013. U.S. House of Representatives. October 4, 2013. http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=325006
Sahadi, Jeanne. “What Happens if Congress Blows the Debt Ceiling?” CNN Money. April 29, 2011. Cable News Network. October 20, 2013. http://money.cnn.com/2011/01/03/news/economy/debt_ceiling_faqs/index.htm
“United States Federal Government Shutdown of 2013.” Wikipedia. October 22, 2013. Wikimedia Foundation, Inc. October 22, 2013. http://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_2013
Narrelle is a homeschooled teen from West Palm Beach, Florida. In addition to writing, she enjoys singing in a choir and playing piano, and loves literature, politics, history, astronomy, and physics.