United States of America shuts down

The American government began to shut down on October 1 following Democratic and Republican stalemate over the 2013/2014 fiscal budget.

ClosedIn a similar fashion to the 1981 Clinton shutdown over budget cuts which lasted 21 days, the Republican controlled House of Representatives has blackballed the Patient Protection and Affordable Care Act (popularly known as Obamacare), insisting that the Act should be implemented  in a year’s time.

Political tension began to build in Washington on September 24, when Senator Ted Cruz of the Tea Party, along with other conservative senators, proceeded to speak against Obamacare for nearly an entire day.

In response to this, the Democratic led Senate passed a vote on Sept 27 to end all conservative attempts to prevent the passing of the budget which won 79-19.

Two days later, The House of Representatives responded with a 231-192 vote in support of delaying the implementation of Obama’s new healthcare laws. It also took to vote and won by 248-174, to repeal taxes on certain expensive medical devices, a point which Democrats say was aimed at helping to offset the costs of Obamacare.

The following day, the Senate voted down the house’s provision to postpone Obamacare as well as the nullification of the medical device tax with a close vote of 54-56.

The House responded later that night with a vote of 228-201 insisting that requirement to buy the new health insurance would be delayed a year, again sending the budget back to the Senate.

After another close vote of 54-46, the Senate again voted down the Republican budget, leading to White House official Sylvia Mathews Burwell, the Director of the Budget Office, to inform multiple agencies’ that an American shutdown was imminent.

Who will be affected?

Government workers will be hit the hardest as close to a million Americans have been told to not show up to work after October 1

These workers include:

  • 400,000 Department of Defence
  • 40,000 Department of Commerce
  • 18,000 Department of Transportation
  • 12,000 Department of Energy.

Other public departments expected to be affected are the Department of Education, the Department of Health and Human Services who all expect severe staffing cuts, as well as all of the Smithsonian institutions, other publicly funded museums, zoos and national parks which will all be closed until the budget is resolved.

Despite the political divide that has taken route in American politics, The House of Representatives in an act of bipartisanship voted 407-0 for paying government workers once they return to work.

In response to this, The White House issued a statement praising the actions of The House of Representatives to the press saying, “Federal workers keep the Nation safe and secure and provide vital services that support the economic security of American family. The Administration appreciates that the Congress is acting promptly to move this bipartisan legislation and looks forward to the bill’s swift passage.”

Even though Democrats and Republicans have agreed on paying back government workers, they are still very far away from agreeing to a budget.

If congress can’t come to a decision on the fiscal budget before October 17, there is a serious risk that America will default on its debt; an event which could have huge global economic ramifications.

“It is estimated that $300 million is lost from Gross Domestic Product every single day… Failure to raise the debt ceiling, on top of this shutdown would be a catastrophe,” said Professor Hamilton, a Brock University Professor specialising in comparative politics. “It’ll scare foreign investors and harm the US’ credit rating. This would be especially painful at a time when the US is slowly crawling out of recession. It would hurt consumer confidence, the stock market and raise the cost of borrowing.”

Despite the shutdown, he expressed his optimism on the situation, stating that despite the instability currently plaguing America, that a compromise would eventually be reached.

“People are already cynical about government and this will further alienate Americans from politics. Obama missed the Pacific Rim summit last week because of this and the standing of the US is diminished when its government can’t function effectively. Fortunately, I am certain that a compromise will be reached, if only because the consequences of defaulting are so great.”

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