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What the Partial Federal Government Shutdown Is All About

Wednesday October 2nd, 2013   •   Posted by Craig Eyermann at 2:11pm PDT   •  

banner_256x256a-source-defense-department On Tuesday, October 1, 2013, the U.S. federal government furloughed some 815,293 of its civilian employees from the executive branch of the government, or 18.5% of its estimated total of 4.4 million employees, which accounts for all military service members and postal service employees, along with all legislative and judicial branch employees.

The reason for this partial government shutdown lies in the failure of President Obama and congressional leaders to agree on a budget for the federal government’s 2014 fiscal year, which began on October 1, 2013. Right now, there are three separate budget proposals floating around Washington, D.C.:

  • President Obama’s budget, which would spend 3.77 trillion dollars, or $30,786 per U.S. household.
  • The U.S. Senate’s proposed budget, which is really the budget of the body’s majority Democratic Party members, which would spend 3.7 trillion dollars, or $30,214 per U.S. household.
  • The U.S. House of Representatives’ proposed budget, which is really the budget of the House’s majority Republican Party members, which would spend 3.5 trillion dollars, or $28,581 per U.S. household.

To understand what the FY2014 budget showdown is really all about, the main difference between all these government spending proposals comes down to three things:

  1. Whether the implementation of the health insurance marketplaces under the Patient Protection and Affordable Care Act (PPACA), and perhaps better known as “Obamacare”, should be allowed to continue.
  2. Whether the federal government spending cuts mandated by the 2011 Budget Control Act will be reversed.
  3. Whether modest reforms to restrain the growth of spending for a number of government programs whose costs have skyrocketed in recent years will be implemented.

So there are a number of things that could have provided an opportunity for the President and the members of the House and Senate to negotiate around this whole past summer, but there have been no negotiations.

Although the efforts of House Republicans to block or delay the clearly and increasingly troubled implementation of Obamacare are dominating the news as the immediate cause of the government shutdown, both President Obama and Senate Democrats have been refusing to negotiate in good faith with their Republican counterparts in the House of Representatives at all on both Obamacare and the increased and unrestricted level of spending they desire for months.

Speaking of that desired level of spending, the chart below shows how far that level is out of whack in terms of the typical U.S. household:


The only reason the level of federal government spending per U.S. household fell in 2012 is because of the spending reductions mandated by the 2011 Budget Control Act.

It would be one thing for the backers of Obamacare to hold the line in support of the law they wrote, claiming “It’s. The. Law.” It’s quite another to try to erase the spending cuts that they also passed into law with bipartisan support. Through their “no-negotiation” strategy, the President and Senate Democrats are actively trying to renege on that deal, using the Republicans’ continuing universal opposition to Obamacare as a smoke screen for that effort, all in their attempt to sustain government spending at unsustainable levels.

The good news is that refusal to negotiate lasted until today, after widespread problems with the implementation of the Obamacare health insurance marketplaces have perhaps finally made it clear to that law’s supporters that the federal government isn’t capable of providing at this time what Obamacare’s supporters have both promised and had years of preparation to deliver. The failure of President Obama to provide effective leadership in implementing Obamacare is really what is driving them to the negotiating table at this very late date.

But then, an effective leader would have been there all along.

The real question now, however, is: how much face will the President and Senate Democrats feel they need to save, and how much resistance to budgetary reality will they feel they need to display to their core supporters? The danger in this is that in seeking to save face, rather than deal honestly to resolve the shutdown, they could well undermine their need to be saved from this crisis of their own making. As such, they remain the biggest obstacles to an early end of the government shutdown and a meaningful resolution of the soon-to-come debt ceiling crisis.

Featured Image:
U.S. Department of Defense

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October 2013