Well back in my hometown Washington DC or just plain old “DC” to we natives to visit friends and family. Talk about good timing, all the news is focused on DC as the Congress and the President do battle over Obamacare and the debt limit ceiling.
I am sure most Americans have lost track of what is happening in the maze of Washington “speak” - sequester, debt ceilings, continuing resolutions, funding and non-funding of legislation (Affordable Health Care Act), cloture, shut down, veto - compounded by the complex rules and regulations involved in government operations.
It may be worthwhile to briefly describe what is going on. At this moment the US House of Representatives has passed a continuing resolution (CR) that funds Federal operations at current levels for the next two months. That bill includes a part that specifically eliminates funding for Obamacare that is scheduled to begin its core operation, mandated purchase by all of health insurance, on Oct 1. The US Senate is considering a continuing resolution that includes funding for Obamacare. If the Senate adopts its CR it will go back to the House for the House to accept or reject and ask for resolution of the conflicting CRs.
The problem lies in the fact that the Federal fiscal year ends midnight, Sept 30. If there is no compromise between the two houses of Congress there will be no funds for Federal operations and thus all operations may close down. Of course most will continue with the expectation that they will be paid from a CR whenever it is adopted, i.e. the Feds will be giving employees, suppliers, contractors, retirees and more chits or IOUs.
There are two implacable forces acting against the CR. The President has stated that he will veto any CR that does not fund Obamacare. The Republicans in the House are determined to stop Obamacare by not funding it. Here is where compromise is needed and so far no one has come up with an acceptable compromise.
Beyond the CR issue is the fact that the Feds will come up against the limit on borrowing by mid-October. If they cannot borrow more they will not have sufficient funds to pay all the bills including servicing current debt. Failure to service current debt usually means no more funds will be made available to the borrower but that does not operate when you talk about the Feds since they always have the option to print more money, that is another way to borrow, unavailable to anyone else.
The House Republicans will not vote for raising the debt limit unless the Feds adopt some more budget restrictions, i.e. lower spending. The Democrats want to eliminate the sequester that has acted to lower Federal spending for the last year. Given that the Feds have operated rather well with the sequester in place there will probably not be sufficient support to eliminate it. So the compromise in this case will probably to continue to sequester in exchange for raising the debt limit.
Ain’t politics fun? Always glad to hear about my hometown but would prefer the news to be more positive.