The History of Health Care Reform: Barack Obama (Part 2: The Shutdown)
Our series on the History of Health Care Reform takes us to where we are today: the government shutdown of 2013. Earlier this month, on October 1, 2013, the United States federal government entered a form of shutdown after Congress failed to enact regular appropriations or a continuing funding resolution for the 2014 fiscal year. About 800,000 federal employees have been indefinitely "furloughed" (laid off) without pay. Another 1.3 million were required to report to work without immediate pay, and many federal government services have been suspended. Only those employees and services deemed "excepted" under the Antideficiency Act remained active, business as usual.
The inability to continue to fund these sectors of the federal government was created when the two chambers of Congress failed to agree to a compromise continuing resolution. The Republican-led House of Representatives offered several continuing resolutions with language delaying or defunding the Patient Protection and Affordable Care Act (commonly known as "Obamacare"), which is how our history of health care reform arrives here. The Democratic-led Senate, offered several continuing resolutions (continuing funding at current sequester levels with no additional conditions). This political fight has so far led to a budget impass which is as of this posting unresolved.
The fight centered on the Continuing Appropriations Resolution of 2014 which was passed by the House of Representatives on September 20, 2013. The Senate stripped the bill of the measures related to the Affordable Care Act, and passed it in revised form on September 27, 2013. The House put the measures back and passed it again in the early morning hours on Sunday, September 29. The Senate refused to pass the bill while it still had measures to delay the Affordable Care Act, and the two sides could not develop a compromise bill by midnight on Monday, September 30, 2013, causing the federal government to shut down due to a lack of appropriated funds.
The first day of the 2014 federal fiscal year, October 1, 2013, was also when many of the Affordable Care Act's measures took effect. The health insurance exchanges created by the Affordable Care Act launched as scheduled on October 1. Much of the Affordable Care Act comes from mandatory spending, rather than discretionary spending, and a continuing resolution would not affect it. Some of the law’s funds also comes from multiple-year and no-year discretionary funds that are not affected by a continuing resolution.
A major concern is that the political gridlock will extend into mid-October, when Congress and the President must agree to raise the debt ceiling to avoid the prospect of defaulting on the public debt. This has already been a problem during this administration, and in May of this year, the Treasury Department was forced to engage in extraordinary measures to fund the government. In August, the Treasury informed Congress that the extraordinary measures would be insufficient starting in mid-October and further specified, in late September, that the U.S. would begin to default on its debts if a new debt ceiling was not approved by October 17 (today). On October 2, President Obama said that the government shutdown is linked to the debt ceiling issue, and that he would not reopen budget talks until Republicans pass a bill raising the debt limit. On October 7, Moody's (a bond rating agency) released a statement in which they said that it was unlikely the U.S. would risk a default on its public debt, and that the nation instead "would continue to pay interest and principal on its debt". Moody's further stated that the financial situation was more serious in 2011 than the current problem. However, such prioritizing of debt payments would require the government to default on many other payment obligations, possibly including a wide array of business contracts, employee salaries, social insurance benefits and other programs. The Council on Foreign Relations said that among the payments implicated are military wages, Medicare and Social Security payments and unemployment support.
If this occurs, some analysts predict dire consequences for consumers. Bloomberg News has predicted that the government's failure to raise the debt ceiling and pay its debt would "halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression."
The shutdown has interrupted federal funding to Indian tribes, including programs that involve health, nutrition and foster care. Some tribes have been able to continue funding programs temporarily themselves but others have had to suspend programs immediately. Some manufacturers the government has hired are experiencing disruptions as the shutdown has prevented these companies from delivering goods and receiving payments for work already done.
An ABC News/Washington Post poll released on October 7, one week after the shutdown, found that 24% approved of Congressional Republicans' handling of the shutdown while 70% disapprove. For Congressional Democrats, 35% approved and 61% disapproved, while President Obama had a 45% approval and 51% disapproval rating. A Fox News poll on October 3, blamed Republicans at 42% and 32% blamed Democrats, while 20%, said all sides are to blame. Congressional Republicans fare worst in public opinion polls as compared to President Obama or their Democratic colleagues, but both parties have higher disapproval than approval ratings for their handling of budget negotiations: Democrats by a margin of 34% in approval to 56% in disapproval and Republicans by a margin of 26% approving to 63% disapproving.
The prospective economic effects suggest that this is not an insignificant matter, and it will have real consequences for real people if it is not resolved. Stay tuned.
EDIT: Since writing this yesterday, I see now that a tentative deal has been reached ending the shutdown. The full story can be found here.
The inability to continue to fund these sectors of the federal government was created when the two chambers of Congress failed to agree to a compromise continuing resolution. The Republican-led House of Representatives offered several continuing resolutions with language delaying or defunding the Patient Protection and Affordable Care Act (commonly known as "Obamacare"), which is how our history of health care reform arrives here. The Democratic-led Senate, offered several continuing resolutions (continuing funding at current sequester levels with no additional conditions). This political fight has so far led to a budget impass which is as of this posting unresolved.
The fight centered on the Continuing Appropriations Resolution of 2014 which was passed by the House of Representatives on September 20, 2013. The Senate stripped the bill of the measures related to the Affordable Care Act, and passed it in revised form on September 27, 2013. The House put the measures back and passed it again in the early morning hours on Sunday, September 29. The Senate refused to pass the bill while it still had measures to delay the Affordable Care Act, and the two sides could not develop a compromise bill by midnight on Monday, September 30, 2013, causing the federal government to shut down due to a lack of appropriated funds.
The first day of the 2014 federal fiscal year, October 1, 2013, was also when many of the Affordable Care Act's measures took effect. The health insurance exchanges created by the Affordable Care Act launched as scheduled on October 1. Much of the Affordable Care Act comes from mandatory spending, rather than discretionary spending, and a continuing resolution would not affect it. Some of the law’s funds also comes from multiple-year and no-year discretionary funds that are not affected by a continuing resolution.
A major concern is that the political gridlock will extend into mid-October, when Congress and the President must agree to raise the debt ceiling to avoid the prospect of defaulting on the public debt. This has already been a problem during this administration, and in May of this year, the Treasury Department was forced to engage in extraordinary measures to fund the government. In August, the Treasury informed Congress that the extraordinary measures would be insufficient starting in mid-October and further specified, in late September, that the U.S. would begin to default on its debts if a new debt ceiling was not approved by October 17 (today). On October 2, President Obama said that the government shutdown is linked to the debt ceiling issue, and that he would not reopen budget talks until Republicans pass a bill raising the debt limit. On October 7, Moody's (a bond rating agency) released a statement in which they said that it was unlikely the U.S. would risk a default on its public debt, and that the nation instead "would continue to pay interest and principal on its debt". Moody's further stated that the financial situation was more serious in 2011 than the current problem. However, such prioritizing of debt payments would require the government to default on many other payment obligations, possibly including a wide array of business contracts, employee salaries, social insurance benefits and other programs. The Council on Foreign Relations said that among the payments implicated are military wages, Medicare and Social Security payments and unemployment support.
If this occurs, some analysts predict dire consequences for consumers. Bloomberg News has predicted that the government's failure to raise the debt ceiling and pay its debt would "halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression."
The shutdown has interrupted federal funding to Indian tribes, including programs that involve health, nutrition and foster care. Some tribes have been able to continue funding programs temporarily themselves but others have had to suspend programs immediately. Some manufacturers the government has hired are experiencing disruptions as the shutdown has prevented these companies from delivering goods and receiving payments for work already done.
An ABC News/Washington Post poll released on October 7, one week after the shutdown, found that 24% approved of Congressional Republicans' handling of the shutdown while 70% disapprove. For Congressional Democrats, 35% approved and 61% disapproved, while President Obama had a 45% approval and 51% disapproval rating. A Fox News poll on October 3, blamed Republicans at 42% and 32% blamed Democrats, while 20%, said all sides are to blame. Congressional Republicans fare worst in public opinion polls as compared to President Obama or their Democratic colleagues, but both parties have higher disapproval than approval ratings for their handling of budget negotiations: Democrats by a margin of 34% in approval to 56% in disapproval and Republicans by a margin of 26% approving to 63% disapproving.
The prospective economic effects suggest that this is not an insignificant matter, and it will have real consequences for real people if it is not resolved. Stay tuned.
EDIT: Since writing this yesterday, I see now that a tentative deal has been reached ending the shutdown. The full story can be found here.