As this past September rolled into October with the stroke of midnight, there was another noticeable change than just the transition of months – our government shut down. Congress missed a crucial midnight deadline on the eve of September 30th, due to the conflict between the Democrats and Republicans over creating a federal budget and the national health-coverage plan. Along with this dilemma, the debt-ceiling deadline was seventeen days later and if Congress didn’t get together to vote to raise the debt-ceiling, the United States would default on its loans. Thankfully, the shutdown ended when President Barack Obama signed a bill to reopen the government and raise the debt limit mere hours before the debt-ceiling deadline. The trouble isn’t over yet though – the bill only lifts the debt limit until February 7th, 2014, when Congress will have to deal with the debt-ceiling issue all over again. Here’s a list of ten things you probably didn’t know about the government shutdown last month and a preview of what could to come again in February:
1. So, why exactly did the government shutdown?
Essentially, Congress couldn’t. Their job is to pass legislation to fund the government, creating a federal budget, by the end of fiscal year, September 30th, and before the new fiscal year begins on October 1. For this to happen, both halves of Congress, the House and the Senate, must pass the legislation, which would then send it to the president’s desk for him to sign into law. The main conflict was over Obamacare, formally known as the Affordable Care Act, which is a national health-care plan signed into law in 2010 that aimed to provide more affordable health care to Americans. The Democratic-led Senate supports the Affordable Care Act while the Republican-led House opposes it, leaving the two halves of Congress pitted against each other. The House agreed to pass a bill to fund the government through December 15 only if Obama agreed to defund the Affordable Care Act. The House passed this provision, but Senate rejected it, sending it back to House. Different provisions volleyed back and forth, with the House passing them and the Senate rejecting them, as the deadline quickly approached. Because of these differences, Congress could not agree on a bill by September 30th so in turn, the government shut down on October 1st.
2. What was shut down?
All “nonessential” government services were closed, including national parks, historic monuments, federally-funded museums, government websites, and zoos. Loan applications for small businesses, college tuition, or mortgages were also closed and you could not apply for Social Security if you did not already have it. The IRS suspended all audits and IRS taxpayer services were shut down. Many “essential” government services stayed open and working, including the postal service, Medicare, social security, federal law enforcement, air traffic control, active-duty military, border security, and emergency and disaster assistance.
3. What happened to the workers?
Federal employees were categorized as either “essential” or “non-essential.” Workers categorized as “essential” continued to work, although they were not paid. Non-essential workers were furloughed (unpaid leave). 1.3 million civilian employees were labeled as essential while about 800,000 federal workers were deemed non-essential and furloughed, including about half of the Department of Defense’s civilian workers. Essential workers and about 1.4 million active-duty military personnel will get paid, although if the government shutdown had lasted longer, their paychecks may have been delayed. There wasn’t a guarantee that the furloughed workers would receive back pay but on Wednesday, October 16th, Congress passed legislation to not only re-open the government, but to provide back pay for the furloughed employees as well.
4. How did the shutdown affect the public?
Most Americans did not experience significant changes in their day-to-day lives. The government shutdown was more of an inconvenience as national parks, museums, and historical sites were shut down and people were unable to apply for social security, passports, loans, and other services. There were a few exceptions to this though; many cancer patients, who apply for clinical trials every week at the National Institute of Health, were denied trials that could save their lives and were forced to wait until the government was reopened. Here at Northeastern, active-duty service members who had planned to start classes earlier this month had their tuition assistance cancelled by the Pentagon. Before they were forced to withdraw from their classes, President Joseph Auon stepped up and assured them that the university would provide financial assistance, allowing them to start their classes as scheduled.
5. What did it do to our economy?
The government shutdown has cost the United States about $24 billion, which is about $1.5 billion per day. To add on to this enormous debt, the debt-ceiling deadline was October 17. While the debt-ceiling crisis was not caused by the government shutdown and was simply a matter of coincidental timing, it was another serious problem that Congress had to address. If Congress didn’t pass a bill to raise the debt-ceiling by that date, then the United State ran the risk of entering default.
6. What happens when we default?
When a country defaults, that means that they do not have enough money to pay their debts. The “deadline” for raising the debt-ceiling was October 17, but that was not the exact date that the country would go into default. At some point in between October 18th and November 5th is when the country would actually go into default, when the Treasury Department would run out of options and would no longer have enough money to pay all the bills. The United States actually hit the $16.699 trillion debt limit back in May, but the Treasury Department has been taking a variety of “extraordinary measures” to raise money without borrowing. It is when these “extraordinary measures” run out (sometime between October 18th and November 5th) that the country will default on its loans, unless Congress passes a resolution to fix this problem. If the country defaulted, it is not entirely clear what would happen; the stock markets could crash or the buyers of Treasury bonds could demand more money, among other unpleasant results. The Fitch credit rating agency threatened to downgrade the United States’ creditworthiness, which would cause considerable damage to the economy.
7. Why did the government finally reopen?
The House and the Senate finally agreed on a budget deal that would raise the debt ceiling and extend the funding of government agencies to mid-January. Obama signed it into law shortly after midnight on Thursday, October 17th.
8. Has the government shutdown before?
Yes, since 1977, there have been 17 government shutdowns, according to the Congressional Research Service. The most recent government shutdown, in 1995, was also the longest, lasting a total of 21 days from December 16th to January 5th. In April 2011, the government almost shut down, but a deal was reached at the last minute. They still had to face a debt-ceiling crisis as well, in which they agreed to raise the debt-ceiling two days before the “deadline.”
9. How did other countries react to the shutdown?
There has been mixed reactions from all over the world in regards to the government shutdown in the U.S. In an article in The Globe and Mail, a Canadian newspaper, writer John Ibbitson stated, “Anything that drags down the American economy drags the Canadian economy down with it.” Other countries are expressing concern as well, including the UK, India, and Russia. Germany and France criticized the shutdown, with Germany’s The Local stating that the leader of the House “neither had the courage nor the backbone to put them in their place” while France’s Le Monde said that the shutdown was “grotesque.” Australia once had a government shutdown in 1975, much like ours, except the way that they handled it was vastly different. The Queen’s official representative, Governor General Sir John Kerr, appointed a new prime minster and shortly after, fired everyone in Parliament and held elections to start over. They haven’t had a government shutdown since.
10. Did the government shutdown stop the Affordable Care Act from happening?
No, it does not rely on annual funding by Congress. The main parts of the Affordable Care Act actually use mandatory funds that aren’t affected by a government shutdown. Health and Human Services requested additional funds from Congress to set up the Affordable Care Act and Congress denied them every time, leading them to find funding from other sources.