Sunday, October 06, 2013

Shutdown Update and Schedule

by Bill McBride on 10/06/2013 09:53:00 AM

• The reason the Republicans shutdown the government is an attempt by "conservative" groups to "defund Obamacare".  From the NY Times: A Federal Budget Crisis Months in the Planning

Shortly after President Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in the capital to plot strategy. ...

Out of that session, held one morning in a location the members insist on keeping secret, came a little-noticed “blueprint to defunding Obamacare,” signed by Mr. Meese and leaders of more than three dozen conservative groups.

It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles: that Republicans could derail the health care overhaul if conservative lawmakers were willing to push fellow Republicans — including their cautious leaders — into cutting off financing for the entire federal government.

“We felt very strongly at the start of this year that the House needed to use the power of the purse,” said one coalition member ...

Last week the country witnessed the fallout from that strategy: a standoff that has shuttered much of the federal bureaucracy and unsettled the nation.
• This is a radical approach to public policy and it is Not Gonna Happen.

• All of the furloughed federal workers will be paid in full for lost pay during the shutdown. The House passed this bill on Saturday by a 407-0 vote. So workers will be paid for not working.

Most defense workers have been recalled. From the NY Times: Hagel Recalls Most Defense Department Workers
Defense Secretary Chuck Hagel made a surprise announcement on Saturday that he would recall next week almost all of the 400,000 civilian employees of the Defense Department who had been sent home when the government shut down.

Mr. Hagel said the decision that “most D.O.D. civilians” would now be exempted from furloughs came after Pentagon and Justice Department lawyers interpreted a budget law passed just before the shutdown to include a larger number of workers.
Congress will pay-the-bills (aka raise the "debt ceiling"). This is not negotiable. Treasury believes they will be low on funds by October 17th.

• Monday, October 14th is Columbus Day (A Federal holiday), and the week of October 14th through October 18th is a "Constituent Work Week" (aka recess). The current schedule is to the have no votes after 3 PM ET on Friday October 11th, so Congress can leave Washington Friday night. It is very unlikely that Congress will leave town that week without agreeing to "pay the bills".

• The bottom line is: 1) the shutdown was caused by groups making non-negotiable demands, 2) the shutdown will be expensive, and my guess is 3) the shutdown will probably end before Congress goes on recess.

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