Liberally minded blogger Josh Marshall doesn’t see how the current state of the debt ceiling issue won’t lead to a great big government shutdown early next year.
See any holes in his reasoning? Do you think his prediction will come to pass? How bad (or minor) will it be, even if so?
I wouldn’t put it past the Republicans to try something like that. I hope it doesn’t happen because the entire thing would harm the US credit rating and lead to higher interest payments which lead to higher deficits.
The last series of government shutdowns didn’t do anything to the US credit rating.
I kind of doubt it. The GOP has no political capital right now. Shutting down the government two months after you just lost an election is not good politics. They need to put their heads down, make some deals, and get ready to run better campaigns in 2014 - repeated the mistakes of the last two years is a bad idea, and I think the leadership knows it.
Whether the leadership can keep the caucus together is a different question, but with such a small majority in the House I doubt it will matter much.
While there is going to be a lot of bluster from both sides, I suspect that they are working feverishly behind the scenes to avoid it. The bluster is for public consumption. Depending who gets the upper hand in the propaganda wars, that side will bring polls showing that “they” won to the table.
Those polls will be used to shape the language of the agreement and possibly tinker with some low priority/high visibility aspects, but the actual agreement will go forth.
The Republicans lost a huge amount of political capital when they stonewalled the government into a shutdown a few years ago. They do not want a repeat of that fiasco. On the other hand, the Democrats saw what happened to the Republicans and they do not want to be in that position, either.
The only obstacles to some sort of agreement are the Tea Party members in the House. However, they have lost a few members in the most recent election and there has been ample evidence that they do not have the country-wide support that they believed they enjoyed. (That’s part of the reason DeMint decided to flee the Senate for the Heritage Foundation.) A weaker tea Party strengthens Boehner’s hand, (which was why he was able to unceremoniously dump three of their members from committee leadership positions, this week, without a ripple in the party), and Boehner wants a deal as badly as Obama or Reid. He wants the deal on his terms, of course, (as do they), but they all recognize that a deal is required and they are going to make it happen.
I will not be surprised if there is some last-minute “extension” legislation to give them a few days to do what they should have done last summer, but they are going to avoid the cliff.
No, but the fiasco that created the fiscal cliff did. If they fail to come to an agreement, again, that will simply demonstrate to many people, (including many in the ratings industry), that the previous down-rating was justified.
Fed checking in.
I give it a 60-70 percent chance of something occurring (as of today), and not for the (sole) reason linked by the OP.
Previous threats of government shutdowns were based on the debt ceiling issue, failure to pass a final budget, or failure to pass a continuing resolution. Legally, we cannot perform the people’s business if the money does not exist, and/or the authority to spend what may exist, is not there. Since the debt ceiling issue has never reached zero hour, there is no precedent. That said, the last major debt ceiling issue did result in government agencies preparing for a government shutdown. In our agency we compiled lists of essential and non-essential personnel, established official/unofficial phone trees, and put the furlough and paperwork mechanisms in place. Had the debt ceiling extension not passed at the last minute, the already-written orders were to be put into effect.
The 1995/96 actual government shutdown was not caused by the debt ceiling issue, but caused by the failure to pass the federal budget nor a continuing resolution (at the previous fiscal funding level) in lieu of passage of a final budget. Thousands of federal workers and federal contractors were furloughed, or laid off, respectively. Federal workers were compensated for their unpaid furlough hours retroactively, but federal contractors were not. The federal contractors were left out in the cold because under federal contract law, generally speaking, they cannot be paid for work not performed per their contracts.
This time around we have a trifecta of issues:
[ul]
[li]The debt ceiling will be reached around the beginning of 2013. Exact dates keep changing at the moment because government spending is fluctuating. Also, the Treasury Secretary can invoke some sleight-of-hand budget maneuvers and move authorized monies around among various accounts to delay the trigger point. One method that has been done several times before is to not pay into the federal pension systems. In all cases those monies are later deposited into the pension systems, along with interest.[/li][li]The Bush tax cuts expire at the end of the year. Plenty of debate here on the SDMB and in the media on this so no need for detail, except for one point. The media and Congress may be so narrow focused on this issue they fail to see the significance of the third issue.[/li][li] The sequestration law has a very high potential of government furloughs and contractor layoffs. Unless Congress acts before it takes effect at the end of the year, government must cut budgets across the board. The failure to address this will result in government furloughs and contractor layoffs. Friends in DOD tell me the White House has already given the go-ahead to prepare for furloughs and layoffs in DOD. I’m only hearing rumbles in non-DOD areas, but nothing definitive, yet.[/li][/ul]
This time around the political climate has changed, on two fronts, that I believe exacerbate the potential for what-we-don’t-believe-could-happen-may-actually-happen. The first is the continuing intransigence of lame-duck Republicans, coupled with Republican leadership stupidity. The lamers have nothing to lose by forcing the issue. They will be out of Congress before the witching hour strikes so might claim “not my problem, I’m not there anymore.” I don’t see them keeping loyalties to those Republicans remaining nor any new Republicans coming into the new Congress.
The second is the general negative attitude against federal employees, not counting Congress (Congress has its own negative ratings.). We’re seen as overpaid and under-worked. Again, no point in actually debating that point here. The perception is very real in the real world, and that’s what matters. That perception expands to includes federal workers seen as not having endured the pain as the private employment areas have suffered the passed few years. All this despite the fact the job layoffs in government total (local, state, federal) are/were much greater than in private industry (percentage numbers) during the last (and some believe still continuing) recession.
The perception is misguided on another front. If sequestration actually occurs, the cuts are unilateral. That means the cuts among the various federal programs are pretty much decided in the law already. Federal administrators may have limited abilities to juggle the accounts to keep critical programs functioning at the expense of others, compared to the considerable leeway with budget and debt ceiling issues. So the likelihood of Social Security/Medicare payments being delayed, even stopped, is a distinct possibility.
Obama and the Congressional Democrats are all aware of this. The media has been pretty good stating as such, because all three issues raised stem from Republican obstructionism. Mitch McConnell’s recent filibuster against himself is getting considerable airplay and does illustrate Republican leadership hasn’t accepted the election a month ago. At the same time, I’m hearing from federal friends across the board in quiet conversations “Bring it on. Shut us down.” It’s not something we really want but it is at the point that the Republicans still don’t get it and the American People don’t get it, either.
There is an X-factor that may be a game-changer. It’s my far out scenario. Obama has already drawn a red line in the sand on Syria. If Syria goes over the line, my belief Obama will act and the Republican hawks will support the decision. They only way that will work is a fast capitulation on the above issues so DOD has the immediate funding it needs to do what it will do when ordered by Obama. Now we then have a whole hell of a new can of worms.