View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
30 September 2013updated 22 Oct 2020 3:55pm

A government shutdown is not the real threat

The debt ceiling debate is far more important.

By Nick Beecroft

As I write, 2.30pm UK time on 30th Sept, it is looking increasingly likely that the dysfunctional US Congress is stumbling towards an impasse which will cause an embarrassing temporary shutdown of US Government. The one consolation that ordinary Americans can potentially cling to in the face of this debacle, is that this is how it’s meant to be-having escaped Britain’s despotic rule, the Founding Fathers drafted the constitution very carefully to ensure extensive check and balances, limitations of powers, and separation of powers between different branches of government.

Last week the Republican House majority amended the so-called  “continuing resolution” (CR-the bill required to authorize government spending), to include de-funding of the Affordable Care Act (Obamacare). The Democrat-controlled Senate was quick to chuck this out, (of course). The House then came back with a tweeked amendment, delaying some Obamacare for a year and repealing a tax on medical devices.  The senate will also reject this version of CR when it rolls into work today at 2pm Washington time.

We may then get yet another iteration from the House, but time will be running out if so, as the current fiscal year ends and government spending authority expires at midnight on 30th, leaving very little time for the Senate and House to complete this ping-pong game successfully. Waving some of the Senate’s ponderous procedures may yet allow passage before midnight, but it’s looking unlikely now.

Up to 800,000 government workers may be laid-off and some economic statistics will not be released, but the law states that many categories of spending are deemed critical and are thus exempt from mandatory shutdown; only so-called “discretionary spending” is affected. The direct hit to GDP is probably about 0.2 per cent per week of shutdown, on an annualized basis, and I would expect the shutdown to last a week at most.

The real problem here is that there are in fact three parties in the House-mainstream Republicans and Democrats, and then the Republican Tea Party caucus; the latter is effectively forcing Republican House Speaker Boehner to take a stab at Obamacare by including these amendments in the CR-even though they have no chance of getting through the Senate.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

The reality is that this is surely a nerve-racking escapade, even for the Tea Party, and certainly for more moderate Republican politicians who know their constituents will not thank them for provoking this pointless to and fro, and a government shutdown. Mid-term elections approach in November 2014 and I believe this is why we should not worry that these CR shenanigans imply anything for the far more important debt ceiling debate, which must be concluded over the next few weeks to avoid a US default.

Congress may yet cause a government shutdown, but if so, that’s probably because politicians know it won’t have disastrous consequences, either for the country or for their chances of re-election – they are extremely unlikely to view the prospect of a US default in the same way. The party seen to have caused that will have committed electoral suicide.

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU