The shutdown of the U.S. government began this morning,because House Republicans refused to pass a funding measure that does not eliminate ObamaCare or push it off by one year. So, presumably, registration of new clients could start today, but without a federal government to manage things. But that’s the least of anyone’s worries.
A few minutes before midnight last night, Budget Director Sylvia Burwell issued a directive to federal agencies to “execute plans for an orderly shutdown.” An estimated 800,000 federal workers faced furloughs, not including the most critical government services, such as the military and air traffic controllers. The rest were invited to come into the office today just to do whatever needs doing to prepare for a long period of paralysis. In fact, they were told not to read or respond to official email. They were told this by official email.
Oct. 1 was supposed to mark a new budget year, and Congress was supposed to pass a spending bill in time, to allow agencies to stay open. They didn’t do that. But there’s a second, possibly scarier deadline coming Oct. 17, when Congress must raise the government $16.7-trillion debt ceiling, or the U.S. will become the biggest deadbeat in human history.
At this point no one knows the outcome of a long-term strike by the federal government. But we can kind of imagine it: things will get ever more apocalyptic as time goes by. But no one has experienced what happens when the world’s last remaining superpower defaults on its financial IOUs.
This is a gigantic game of chicken between Republicans and Democrats, and it could end today, next week, a month from now. The president might come up with an executive trick to resolve this unprecedented event in the history of mankind – or the House might perform some kind of economic coup d’état to disolve the Obama administration. But we’re more concerned with the suffering of individual Americans, and most notably the suffering of American Jews.
So, Social Security payments will go out this month, but they might be delayed, because of the reduced federal work force. If you arranged for direct deposit of your benefits, we think you’ll get them in a timely fashion.
In general, big entitlement programs like Social Security, Medicare and Medicaid, enjoy mandatory funding and do not require an annual renewal by Congress. Incidentally, this also means that The Affordable Care Act, the very prize on which Republicans are keeping their eyes (47 attempts to kill it so far, but who’s counting) is also guaranteed a long and healthy life, because it, too, is mandatory.
Federal employees running these mandatory programs are considered essential. When President Clinton played chicken with the Republicans and let the government be shut down, the Social Security administration brought back 50,000 employees from their furlough, to handle the claims.
But, again, once we get to October 17, all bets are off, because somebody would have to decide who gets paid first, folks who sold pork sandwiches to the U.S. army, or U.S. senior citizens.
Treasury secretary Jack Lew wrote: “We estimate that, at [Oct. 17], Treasury would have only approximately $30 billion to meet our country’s commitments. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion.”
Prioritize, you say? Well, funny you should say that, because a Bipartisan Policy Center report, written by Shai Akabas and Brian Collins, says prioritization is inconceivable.
“It would involve sorting and choosing from nearly 100 million monthly payments,” they wrote. The Treasury Department does not have the technical capacity to do this, much less the legal authority.
The Obama administration also says it can’t prioritize payments. “Any plan to prioritize some payments over others is simply default by another name,” Lew wrote in a letter to House Speaker Boehner. “There is no way of knowing the damage any prioritization plan would have on our economy and financial markets.”
The Miami Herald reports that homeless shelters and elder-care agencies are working through cash-flow projections to see how long their reserves will last without ongoing injections of federal aid.
So, here’s the painful list of what you can’t do today and for the duration of this crisis:
