After shutting down the U.S. government for 16 days and driving the nation toward the brink of default, a chastened Congress voted late Wednesday to reopen federal agencies, call hundreds of thousands of civil servants back to work and raise the $16.7 trillion debt limit.
An agreement struck by Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) ended a stalemate created last month, when hard-line Tea Partiers pushed GOP leaders to use the threat of shutdown to block a landmark expansion of federally funded health coverage.“
Was it worth the pain?
“We’ve been locked in a fight over here, trying to bring government down to size, trying to do our best to stop Obamacare,” House Speaker John A. Boehner (R-Ohio) told a Cincinnati radio station. “We fought the good fight. We just didn’t win.” That’s because the Tea Party Republicans’ obfuscation bordered on criminality. Finally, the Senate overwhelmingly ratified the deal Wednesday evening, 81 to 18, with more than half of Senate Republicans voting yes.
A few hours later, the House followed suit, approving the measure 285 to 144. Eighty-seven Republicans joined a united Democratic caucus in approving the measure, allowing Congress to meet a critical Treasury Department deadline with one hours to spare.
Obama signed the measure into law shortly after midnight, reopening parks and monuments across the nation, restoring government services and putting furloughed federal employees back on the job, many of them in the Washington region. “Employees should expect to return to work in the morning,” Sylvia Mathews Burwell, the White House budget director, said in a statement.
The measure also guarantees those workers back pay for time spent at home, aid to flood-ravaged Colorado and provided extra cash for fighting wildfires out West. And it grants the District government, which relies on Congress to approve its budget, authority to manage its own affairs through the 2014 fiscal year.
Kicking the can down the road or insanity redux
Enforcement of the debt limit is suspended until Feb. 7, setting up another confrontation over the national debt sometime in January, independent analysts estimated. Meanwhile, federal agencies are funded through Jan. 15, when they might shut down again unless lawmakers resolve a continuing dispute over deep automatic spending cuts known as the sequester.
Senate Budget Committee Chairman Patty Murray (D-Wash.) was to have breakfast Thursday morning with her House counterpart, Rep. Paul Ryan (R-Wis.), to start a new round of talks aimed at averting another crisis. Obama repeated his vow to work with Republicans to rein in a national debt that remains at historically high levels.
Was it worth the national disgrace?
Ask officials at the White House if the battle was worth it, the relentless back and forth, the acrimony between Republicans and Democrats, Boehner and Reid, factions against factions. Was it worth fighting to raise the ceiling to avoid default, and the answer despite residual protest, kicking the pavement, and pontificating would be no. This could have been done simply and effectively. I qualify that “no” with the fact that this Punch and Judy show will return (not disappear) in January to haunt us. This battle of the Reds and Blues has rarely been so painful for the United States and the world to hear and bear, and remains an international disgrace.
If the failure to increase the debt ceiling had not passed, it would have started an avalanche of pain. You know, when the bills started going unpaid and America’s creditors started calling in their debts, and a great cloud of gloom and failure descended on America.
Even the stoic Jay Carney, the White House press secretary, told reporters on Tuesday, “For details on what would happen if we were to cross that line, I would refer you to the Treasury Department.” But Treasury Department officials said no, especially Secretary Jacob J. Lew, who told Congress at a hearing last week, there wasn’t much left for him to do.
The decision not to provide details is simple: no one knew what would happen yesterday, today or Saturday or Sunday or Monday, Tuesday and Wednesday. It was literally a dark hole in space. In modern times, the United States government has never defaulted on its debt or failed to raise the debt ceiling. So why, excepting mostly the Tea Party Republicans obsession to gut Obamacare, would anyone have wanted it now?
The truth is, the federal government had run out of its authority to borrow money months ago. Since then, Treasury had been juggling funds with what officials call “extraordinary measures” created to pay the bills as Congress carried on its marathon match to win a decision to raise the limit. Mr. Lew said he would no longer be able to do that after Oct. 17. But now he won’t have to worry any longer. The money will be there.
The stock market, which has remained relatively stable so far, could have taken a dive. Buyers of Treasury bonds were demanding higher prices, raising the amount of cash that the government would need to pay out. And the United States itself could have faced unexpected expenses, just the way many families did, that would have pressured the Treasury.
Many of the Democrats’ warnings had been built around the idea that missing the deadline yesterday would have spellrf doom for the United States and the global economy. After meeting with Obama on Tuesday afternoon, Representative Nancy Pelosi of California, the Democratic leader, was asked by a reporter whether Americans would even notice any immediate changes.
“Oh, please. I mean, we’re talking about something so catastrophic . . .” Pelosi said. She said the idea of barreling past the deadline would have been “insanity.”
Certain cuts might put the U.S. in danger
Some market observers had suggested that the government might have enough money to pay its bills for several days, noting that it must make a $12 billion Social Security payment on Oct. 23 and a $6 billion interest payment on the public debt on Oct. 31. On Nov. 1, the government has to spend $58 billion for Medicare and Social Security payments, military salaries and other expenses, according to the Bipartisan Policy Center, a research group based in Washington.
But White House officials had declined to confirm those dates or to offer any information about what they expected to happen if lawmakers did not reach a deal yesterday. Asked when it would be “too late” for Congress to act, Carney demurred.
“I’m not sure what that means,” he said. “They needed to act as soon as possible because what is absolutely true is that every day we were in shutdown mode, there was harm done to hundreds of thousands of Americans and indirectly to many, many more. And there’s direct harm done to our economy. And every day were getting closer to the point beyond which we have never been.”
Administration officials often point out that the damage from the high-stakes standoff had already begun. Short-term Treasury bills became more expensive for the government to issue, and bond holders were demanding higher interest rates in light of what they saw as a riskier investment proposition.
And on Tuesday, the Fitch credit rating agency had put the country on a watch, which could result in a downgrading of America’s creditworthiness based on a belief that our political system had ground to a halt. That could have meant a downgrade was coming even if lawmakers reached a last-minute deal; only time will tell now that a deal has been made.
Some Republican lawmakers and pundits had said that the government could avoid serious economic damage by deciding to use its cash on hand to make the interest payments on its debt, even if that meant choosing not to make automatic payments to Social Security and Medicaid recipients or to satisfy other non-debt obligations. This helped avoiding a painful disaster.
White House officials scoffed at such ideas, in part, because of the political nightmare that such moves would create. But they also noted that global investors who were considering whether to buy American bonds might get spooked by the thought of investing in a country that is willing to renege on such big promises to its elderly and poor.
Bottom line
In the end, though, the honest answer is that making a deal on paying the debt by raising its limit was absolutely the right thing to do, even though “The very uncertainty that has been created by this manufactured crisis was not what we needed as an economy going forward,” Carney had said on Tuesday. He claimed “It was already causing uncertainty among Americans, which, in turn, has the people making decisions about how they would spend their money, which has a negative impact potentially on the economy. And that creates a cascading effect that can only be bad.”
Asked about cable news programs that are running countdown clocks ticking down to the deadline, Carney shrugged. Que sera, sera. Fortunately, the outcome was positive.
Countdown clocks versus common sense
“As much as I’d like to improve the quality of the countdown clocks,” he said, “I would have had to refer you to Treasury on the minute and the hour.” Well, fortunately that won’t happen now. For the time being, the debt ceiling has been raised to avoid default. And that, no matter how painful the process was, has been worth the struggle.
Speaker Boehner let conservatives, including Tea Partiers, run House strategy, and got nothing in return but a headache.
In fact, Boehner’s campaign succeeded mainly in undermining popular support for the Republican Party. In fact, by late Wednesday, dozens of anxious GOP lawmakers were ready to give President Obama almost exactly what he requested months ago: a bill to fund the government and increase the Treasury Department’s borrowing power with no strings attached.
“With the shutdown behind us and budget committees forming, we now have an opportunity to focus on a sensible budget that is responsible, that is fair, and that helps hardworking people all across this country,” Obama said at the White House. That is, at least till January 15 and February 7. That said, one hopes this will seal the mouths of the Tea Party demons and the fools that follow them not to begin this exercise in futility again.
Jerry Mazza is a freelance writer and life-long resident of New York City. An EBook version of his book of poems “State Of Shock,” on 9/11 and its after effects is now available at Amazon.com and Barnesandnoble.com. He has also written hundreds of articles on politics and government as Associate Editor of Intrepid Report (formerly Online Journal). Reach him at gvmaz@verizon.net.
