The Pending 2013 Obamacare, oops 2015 Planned Parenthood Gov't Shutdown: It's 1995 All Over Again & What It Means To You
PRELUDE TO THE 2013; NO NOW 2015 FISCAL DISASTER
ON NOVEMBER 14, 1995 THE DEPT OF THE AIR FORCE told me not to come to work; they had no money to pay me; but I was allowed to come back to work on the 19th. Then on December 16, 1995, I was told to stay home again; this time my furlough lasted until January 3, 1996. This was a result of the Conservative wing of the Republican Party refusing to negotiate with the Democrats and President Bill Clinton over budget issues. In the end, Conservatives caved-in, finally negotiating a deal which only gave them part of their demands, rather than the whole enchilada they thought they had a mandate for with the "Contract With America".
[Author’s note – I try hard to remain pragmatic in my analyses and commentary, meaning I don’t like taking the side on each and every issue. Instead, I take the side where the facts, history, and logic direct me. Often, as in this piece, when the issue is financial, I end up on the left-of-center because extremist fiscal positions have taken control of the Republican Party since 1995. And, history has shown time-and-again, that extreme positions, whether they come from the Right or the Left, are impractical and cannot work in the real world. What we are seeing today is a wonderful example.]
Having said that, the fiscal year ended September 30, 1995, and the Conservatives of Congress had not passed a budget (compare this to today’s Conservative rhetoric about the Democratic Senate) nor the required appropriations. Therefore, Congress passed a continuing resolution (CR) to fund the government until November 13, 1995. While Clinton and the Conservatives both wanted to cut the budget, they wanted to do it in different ways. Each also had differing assumptions about economic growth, medical inflation rates, and anticipated revenues; it turned out Clinton’s estimates were closer to reality. Clinton wanted to focus on improving infrastructure, R & D, public health, education, the environment, and Medicare (the same thing President Obama has been championing sense 2009); all of which cost money in places the opposition didn't want to spend it. On the other hand, the Conservatives wanted to make Medicare more expensive (and therefore less costly to taxpayers), by raising Part B rates; make it harder or impossible for the U.S. Treasury to dip into federal trust funds to avoid a borrowing crisis; limit appeals by death-row inmates; make it harder to issue health, safety and environmental regulations; and commit the President to a seven-year balanced budget. Further, during the budget cutting fight, Speaker Gingrich threatened to make the U.S. default on its financial obligations by not raising the debt ceiling; sound familiar?
By November 19, 1995, both sides agreed to try to hammer out a balanced budget deal; so another CR was passed set to expire on December 15, 1995 and back to work I went. December 15 came and went with no resolution and, you guessed it, I was out of a job again until a compromise was finally reached in very early 1996.
A PYRRHIC VICTORY
WHAT THIS CONSERVATIVE "GAME-OF-CHICKEN" accomplished in 1996 was little in the way of the large-scale cuts the Conservatives were seeking and higher taxes. They did, however, get a promise to balance the budget in seven years, which Clinton, the Democrats, and the Republicans. This didn't happen, however, through the Conservative panacea of cost cutting, but through an expanding economy.
The government shutdown accomplished two other results which Conservatives incessantly accuse Democrats of doing … it added $1.4 billion to the national debt and it chopped maybe ½ a percent from economic growth according to the Congressional Budget Office (CBO)!!! If you take inflation into account, Conservatives added almost $2.1 billion (2013 $) to the national debt; but you didn’t hear them complaining about it then, that is for sure.
Flash forward to 2013 (yes, the shutdown finally did happen after this Hub was orignially published) and 2015] what do we find once more ... conservatives, such as Senator and presidential contender Ted Cruz, wanting to shutdown the government for a third time regardless of the upward pressure on the national debt and downward force on GDP Oh yeah, the next election in 1996 saw the Democrats gaining back a eight of the seats they lost the previous time out. That was then; today the situation in 2013 and again in 2015 is much different.
WHAT MIGHT THE COST BE IN 2013 - 2014?
IF THE CONSERVATIVES ARE SUCCESSFUL in shutting down the federal government again, and the length is the same three to four weeks, then the CBO thinks that, at a minimum, the GDP can be expected to lose 1.4 percentage points! The cost would, be no less than the $2.1 billion (2013 $) that was experienced the last time, common sense suggest it may be twice that this time. This is so, in my opinion, because of the Conservative opposition to President Obama’s economic policies and their total political dedication to, first stopping his reelection (failing miserably in the process), and then second, to destroying his second term; a dedication so strong that it appears to be at the exclusion of all else keeping the economy weak. Further, because of this weakness in the economy, some economists are now suggesting such a shutdown could push America back into another recession when you couple it with the impending international disaster from the Conservative manufactured debt-ceiling crises occurring a few days later. If this occurs, the cost could go up into the trillions!
WHAT WILL A THREE TO FOUR WEEK SHUT DOWN MEAN TO YOU ... PERSONALLY?
SO, WHAT CAN YOU PERSONALLY EXPECT if the federal government shuts down for an extended period? Quite a lot! The degree of discomfort will depend on your job, but virtually all Americans will feel its effect one way or another.
- The one thing that won’t be affected is Obamacare!! Its implementation is not dependent on Congressional budgets. Obamacare’s continuing operations use appropriated funds, but its implementing funds have already been appropriated.
- The people most affected by a shutdown will be the million or so federal workforce, of course. Their paychecks will stop. Now, to be fair, there has never been a case where we weren't paid retroactively, but for those four weeks, we had to rely on our own resources or unemployment. Equally hurting will be the millions of private contractors whose pay also stops for that period of time; again unemployment will take a hit, but their loss of pay was, and will be, permanent. It is never certain, of course, whether history will repeat itself and Congress will authorize back-pay for civil servants; I wouldn't hold my breath.
- All you gun lovers out there, forget about getting a gun permit anytime soon, or a background check completed. Just consider the backlog that is going to be created.
- How about everyone who likes to travel? Don’t try to get a passport, you won’t. Don’t try to go to a National Park; all 368 will be closed to you. If you work in the airline and tourism industry, prepare for layoffs; they were hurt badly in 1995-1996.
- For those of you in the military don’t count on your mid-October paycheck showing up, it won’t. Unlike civil servants however, you will be paid in IOUs, redeemable once the Congress funds the government once again. Further, change of stations will be delayed, medical offerings scaled back, facility and weapons maintenance suspended, thereby reducing military readiness (I watched this happen in the big drawdown during the 1990’s from my position in the Pentagon)
- Small businesses and home buyers , you think it is tough getting a loan now, wait until the government shuts down, put your hopes and plans on hold for awhile.
- If you live in D.C.. expect to see all city services, including garbage pick-up, come to halt. You probably know this already, but for the rest of you, Congress must appropriate Washington D.C.’s annual budget
- If you have savings that is dependent on the stock market, get ready to watch it shrink again. While the shutdown will drag the market down and decrease the value of your savings, when tied with the debt ceiling crisis, you can have fun watch it plummet!
- Me, I turn 66 in Oct, guess what I am probably not going to get in November, my first Social Security check. Maybe not in December either because of the backlog that will be created. However, last time around, President Clinton did keep enough Social Security workers on the payroll to process regular SS checks; just not start new benefits; Obama is expected to do the same.
IT WAS IN 1995 WHEN CONGRESS started its downward slide into oblivion in terms of public acceptance of its ability to govern. If they do it again in 2013, then if polls could go negative, they probably would. American’s, when they visit other countries, probably avoid talking about the U.S. in order to avoid the snickering resulting from our Hatfield and McCoy style of politics; it is downright embarrassing! We have no right to call ourselves a “great” nation when we put ourselves and the world at risk in order proves a political point such as the Conservative wing of the Republican Party has been doing since 1995. I am not saying the Liberal wing of the Democratic Party have not carried things too far in their day, but I do not believe there has been a time in American history, even in the dark days of the Jefferson-Adams battles, did it get to this level of self-destructiveness.
CURIOUS MINDS WOULD LIKE TO KNOW
HOW MUCH WOULD AN EXTENDED FEDERAL GOVERNMENT SHUT DOWN HURT YOU?
DEMOGRAPHIC SURVEY #1
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