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Potential Shutdown: Where we are and how we got here
With all of the talk related to a government shutdown, now might be a good time to review where we are and how we got here.
The federal government’s fiscal year ends on September 30 every year. Congress and the President must agree on funding to continue to operate the discretionary programs in the federal budget beyond that date. Those programs make up about one-third of federal spending with the largest portion being military programs.
The other two-thirds of federal spending is mandatory or entitlement programs, like Social Security, Medicare, Medicaid, and Food Stamps, and the end of the fiscal year does not affect them. They continue indefinitely until a new law is passed that changes those programs (The vast majority of the funding for the new health care law, known as Obamacare, is mandatory spending and is therefore unaffected by a government shutdown).
Funding for programs in the one-third of the budget that is known as discretionary programs expires at midnight on September 30. Congress and the President must agree on funding measures for them to continue to operate, and that is normally done through twelve individual funding bills. So far this year, the House has passed four of those bills; the Senate has passed none.
In the absence of the individual funding bills, Congress and the President agree on a Continuing Resolution (CR) to continue government operations at the current level of funding. Sometimes the CR can last several months until the funding levels for the individual programs are settled.
The House passed a CR on September 20. It would fund government programs until December 15, 2013, and included a provision to defund Obamacare. The Senate voted to remove the Obamacare section.
The House passed another CR just after midnight on September 29, which again funds discretionary programs until December 15 and delays all of Obamacare, including the new taxes it imposes, for one year. That bill also repeals the new medical device tax. The House passed a separate measure that requires military salaries to be paid on time even if other discretionary programs are not funded.
As of noon on September 30, the Senate has not acted on that bill, although Senate Majority Leader Harry Reid has said that they will reject it. The President has repeatedly said he will not negotiate. If a spending measure is not passed and a portion of the government shuts down, I will have more specific information on my website about what will be affected and what will not.
According to the Washington Post, there have been 17 government shutdowns since the modern budget process was instituted in 1976. Most of them last just a few days, although some went on for a few weeks. Most of them occurred when government was divided between the parties, but an interesting historical note is that five of them occurred when Jimmy Carter was President and Democrats controlled the House, Senate, and White House.
In a little more than two weeks, there will be another deadline. The Treasury Department has announced that the United States will reach the debt limit on around October 17. Once the debt limit is reached, the government cannot borrow more money, even to pay benefits of entitlements like Social Security. At this point, it looks like the House will not pass a debt limit bill until the CR dispute is resolved.
In both the CR and the debt limit, there are two primary issues where there are significant differences. One is Obamacare. A majority in the House believes that this law will do significant damage to the country when it fully takes effect on January 1, 2014, and we want to prevent that damage. President Obama and a majority in the Senate do not want to change it.
The other major issue is the budget. The House wants to make reforms that set the government on the path toward a balanced budget. We want to replace the across-the-board cuts inflicted by sequestration, which are not really across-the-board but rather are limited to only certain programs, with targeted savings in high growth programs. I am particularly concerned about the damage that sequestration is doing and will continue to do to our national defense.
At this point, I cannot say how these differences will be resolved. It is irresponsible for anyone, especially the President of the United States, to say that he will not negotiate or compromise. With a Republican majority in the House, a Democratic majority in the Senate, and Barack Obama in the White House, no one will get everything he or she wants. The best interests of the country must always come before politics. Stay tuned for further updates.