Tuesday, 01 October 2013

Shutdown: Democrats Trigger “All or Nothing” Bluff

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The federal government entered into a partial shutdown at midnight October 1 as congressional leaders were unable to agree upon a “continuing resolution” appropriations bill to fund programs in the new fiscal year. The partial shutdown — something that has happened 17 times since 1976, but not at all since 1996 — means that some non-essential federal agencies will close their doors, such as national parks and tour guides of Washington, D.C. government offices.

In the budgetary battle, Republican control of the House guarantees the party a constitutional stranglehold on government spending. All spending must be approved by the House of Representatives under the U.S. Constitution. But Democrats have dug in ideologically, and pledged that unless all functions of the federal government are funded, the Democrat-controlled Senate and White House will ensure that no funding bill becomes law. “Our negotiation is over with,” Senate Democratic leader Harry Reid told reporters September 30. “And I've said that for two weeks.” 

The question is: Will Republicans — who have all the constitutional leverage — bow to pressure and fund ObamaCare if poll numbers turn against them (as opinion polls already have done slightly)? Under the U.S. Constitution, Democrats cannot force Republicans to pass funding for ObamaCare. But in the 1995-96 shutdown crisis, House Republicans largely gave in to Clinton White House demands that government spending continue largely unchecked. Thus, employing the threat of a perpetual shutdown and trying to shift the blame to Republicans using the Democratic-controlled mass media may be the best means Democrats have to extract the ObamaCare funding. 

The Democratic-led U.S. Senate rejected a House-passed bill September 30 that would have funded all functions of the federal government except ObamaCare through December 15. The U.S. Senate voted down the House bill because it would have delayed the healthcare mandate of the Patient Protection and Affordable Care Act for one more year (the mandate took effect today), and because it repealed a medical device tax that would have funded much of the budgetary costs of ObamaCare. Democrats have demanded a “clean continuing resolution” in the budget battle, meaning that the appropriations bill would simply fund all functions of the federal government without any other changes in law within the bill. Republicans have insisted that funding in the bill not pay for ObamaCare, and added the medical device tax repeal to their version of the bill.

What does a “clean” continuing resolution mean?

Ideally, appropriations bills are supposed to be “spending only” bills, passed after — and separate from — the “authorization” bills establish the programs and funding levels that are enacted into law. Congress has tried to separate the constitutional functions by designating authority to make rules for programs (authorizations) to specialized committees, such as the House Armed Services Committee deciding what jet aircraft to buy for the Air Force, and by putting all funding (appropriations) into a single appropriations committee for funding. The process means that Congress votes twice before any money is spent from the U.S. Treasury, if the process works.

But very often it does not happen that way. In many instances, members of the appropriations committees in both the House and Senate have demanded special allotments for projects in their districts, creating both the programs and the funding in the same bill. And in many other instances, the reverse happens. Programs that are set up and passed into law with funding levels set over many years but have their funding cut during the appropriations process, as recently happened with the F-35 Joint Strike Fighter.

In the case of the F-35, cost overruns along with lack of military necessity created congressional pressure to withhold appropriations from elements of the program. The same may be said of ObamaCare, which has created sticker-shock in some people's premium increases and will cost twice as much over 10 years (according to the non-partisan Congressional Budget Office) as Obama had predicted.

The funding battle has focused upon implementation of ObamaCare, with calls by Tea Party-aligned congressmen demanding “defund ObamaCare.” Indeed, the costs of ObamaCare will amount to nearly $1.8 trillion over the next decade. But the individual healthcare mandate — the most unpopular part of the bill, which requires persons to purchase health insurance or pay higher income taxes — involves no direct costs to the federal government. Thus, defunding ObamaCare would not abolish the mandate, though it may become more difficult to enforce the mandate if funding were eliminated for all aspects of the program.

The drive to defund ObamaCare may pick up steam after the Washington Times reported September 30 that many government workers suddenly became eligible for taxpayer-subsidized abortions for the first time in a generation. The Times quoted the U.S. Office of Personnel Management (OPM) acknowledging that the healthcare coverage paid for with tax dollars now includes coverage of abortions. The OPM claims they will try to undo this change — which violates federal law — in the transition to ObamaCare. “While plans with such coverage may be offered on an Exchange, OPM can and will take appropriate administrative steps to ensure that the cost of any such coverage purchased by a member of Congress or a congressional staffer from a designated [exchange] is accounted for and paid by the individual rather than from the government contribution, consistent with the general prohibition on federal funds being used for this purpose,” the Washington Times reported the Office of Personnel Management said in its ruling.

In the ongoing battle over federal funding, both sides have employed ever more desperate rhetoric. "Look, the bottom line is very simple. You negotiate on this, they will up the ante for the debt ceiling and the full-time CR," Sen. Charles Schumer (D-N.Y.) told The Hill September 30. "You cannot negotiate when they take hostages and when they extort, period." But who will win the funding battle will depend upon which side folds its hand first, as Democrats have little constitutional leverage other than to threaten a shutdown until their demands are met.

The federal fiscal year 2014 began at midnight October 1.

 

Related article:

They're Lying to You: Appropriations and “Shutdown” Lies

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