Government Closed, Sun Still Expected To Rise

[Townsend]

Analysis - What default? Republicans downplay impact of U.S. debt limit

http://news.yahoo.com/analysis-default-republicans-downplay-impact-u-debt-limit-003357257--business.html

WASHINGTON (Reuters) - The Obama administration says a U.S. default would be "catastrophic." Economists say it could plunge the country into recession and prompt a global financial meltdown.

To many Republicans, however, the prospect of the world's lone superpower juggling its bills doesn't seem so bad. The government could muddle through without a debt-ceiling increase as long as it kept up with interest payments and a few other priorities, they argue.

"We are not going to default on the public debt. That doesn't mean that we have to pay every bill the day it comes in," Republican Representative Joe Barton of Texas said on CNBC on Monday.

Barton's position could reflect a genuine disagreement with warnings by Wall Street and Washington analysts or he could be downplaying the default to gain tactical advantage in negotiations with President Barack Obama. But Barton isn't an outlier.

Nearly every Republican in the House of Representatives voted for a bill in May that would direct the Treasury Department to prioritize bond payments and Social Security retiree benefits over other obligations if Congress failed to extend its borrowing authority. In the Senate, 29 of the chamber's 44 Republicans have signed on to the idea.

Republicans say that approach would minimize the fallout if Congress fails to raise the debt ceiling before the Treasury Department exhausts its borrowing authority on October 17.

Past and present Treasury officials and Wall Street analysts reject that view out of hand as naive at best.

In order to make sure bond payments and Social Security checks went out on time, the government would have to delay other payments by days or weeks. That would send a massive economic shockwave through military contractors, hospitals, and other entities farther down the priority list.

The plan also may not be workable in a practical sense. The U.S. Treasury handles 4 million transactions a day, and separating some of them out would be practically impossible.

"It's mind-boggling. I don't know what to say," said Tony Fratto, a Republican and a former Treasury Department official under President George W. Bush. "Every member of Congress should know this. These aren't complicated concepts."

That may not be the point. By presenting a plan to deal with a possible default, Republican lawmakers can show voters they are taking steps to minimize any potential fallout.

NEGOTIATING PLOY?

And as the October 17 deadline approaches, they may gain a negotiating advantage by showing Democrats they are not particularly afraid of going right up to the edge - or over it.

"It's a strategy to say, 'We can hold out longer, because we don't think it's so bad,'" said New York University political science professor Steven Brams, who has written extensively about strategic decision-making.

With the government entering its second week of a partial shutdown due to a dispute over Obama's healthcare law, business leaders are warning against further brinkmanship. The U.S. Chamber of Commerce has called for a "clean" debt ceiling increase, without any other legislation attached, while financial executives like Lloyd Blankfein of Goldman Sachs have urged the lawmakers to resolve the dispute quickly.

The uncertainty has weighed on financial markets. The CBOE Volatility index .VIX - a measure of market turbulence called the "fear index" - has risen by nearly 50 percent over the past three weeks amid fear of a default and anxiety over a related government shutdown that took effect on October 1.

"With each passing day, the market becomes more restless," said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.

The last debt-ceiling showdown in August 2011 proved costly. Lawmakers averted default with a last-minute deal, consumer confidence plummeted and the S&P 500 .SPX fell 17 percent. Although the S&P 500 recovered in a little over two weeks, the standoff will cost the government $18.9 billion over 10 years in higher interest costs, according to the Bipartisan Policy Center.

Republicans touted their prioritization scheme back then as well. Some lawmakers, notably Tea Party favorite Michele Bachmann, a Republican representative from Minnesota, said they would not vote to raise the debt ceiling no matter what.

This time around some Tea Party Republicans, like Florida Representative Ted Yoho, also say they will vote 'no.'

But party leaders like Boehner say they will be able to round up enough votes to raise the debt ceiling as long as they get concessions from Obama.

Many Republicans also suspect that the administration has some additional tricks to stave off default that they haven't disclosed. While Treasury says it can't guarantee payments after October 17, analysts say actual default could come days or weeks later, and lawmakers wonder if they are being rushed unnecessarily.

Though both sides have begun to extend tentative feelers that could lead to a way out of the standoff, both believe that they can extract the most concessions by holding out until the last possible minute. In this context, Republicans' move to downplay the October 17 deadline makes sense, Brams said.

"I don't expect we'd see a compromise until we're at the brink," Brams said.

[Townsend]

Votes are there to break shutdown, but not the will

http://politicalticker.blogs.cnn.com/2013/10/08/votes-are-there-to-break-shutdown-but-not-the-will/?sr=fb100813shutdowncount1015a

Washington (CNN) – There appeared to be enough votes in the House on Tuesday to approve legislation to reopen the federal government, according to an ongoing CNN survey of House members

All 200 Democrats and 17 Republicans support passing a continuing resolution with no additional legislative strings attached that would reopen the federal government, which has been partially closed for a week over a bitter policy dispute between Republicans and Democrats on health care. The number 217 is significant in that it is the minimum needed for the measure to win approval in the House.

CNN's vote count appears to bear out what President Barack Obama said on Monday.

"The truth of the matter is, there are enough Republican and Democratic votes in the House of Representatives right now to end this shutdown immediately with no partisan strings attached," Obama said.

But this does not mean a vote will happen any time soon, given that these Republicans have not indicated a willingness to try to force Speaker John Boehner, R-Ohio, to bring a continuing resolution with no strings attached to the floor for a vote.

The clean CR is at the center of the dispute between Obama and Republicans, the latter trying to use the government shutdown as a legislative avenue to help defund the president's health care law. Many House Republicans are demanding that passage of a continuing resolution is contingent on the health care law being delayed – the first step in an effort they hope to use to dismantle it. The president and Senate Majority Leader Harry Reid, D-Nevada, have said that the GOP's efforts are a non-starter.

As is the case with all vote counts, the numbers continually evolve and change by the hour and day.

Still, Boehner has maintained that there are not enough votes in the House to pass a "clean" CR.

"There are not the votes in the House to pass a clean CR," the speaker said Sunday on ABC's "This Week." "The American people expect in Washington, when we have a crisis like this, that the leaders will sit down and have a conversation. I told my members the other day, there may be a back room somewhere, but there's nobody in it."

Republican Rep. Charles Dent of Pennsylvania disagreed with the speaker's assessment. He told CNN on Monday that if the vote were to come to the floor, he believes it would pass.

"I believe a clean CR would pass comfortably," said Dent. "I'm not here to predict the number, I think it would clear the 217 vote barrier."

In response, Obama dared Boehner on Monday to prove that he doesn't have the votes for a clean continuing resolution.

"If Republicans and Speaker Boehner are saying there are not enough votes then they should prove it," Obama said. "Let the bill go to the floor, and let's see what happens. Just vote."

On Monday, as Democrats trumpeted other vote counts that appeared to show there are enough votes in the House to pass a clean government funding bill, a number of lawmakers began to walk back previous statements."

Republican Rep. Devin Nunes of California was one of those lawmakers. After telling Huffington Post and others that he supported a government funding bill with no strings attached, his spokesman said Monday that "that was never the case."

"He does not support a clean CR, does not support it, does not advocate it," said Jack Langer, a spokesman for Nunes.

Republicans Leonard Lance of New Jersey and Randy Forbes of Virginia, who other news outlets report have supported a clean government funding bill, told CNN on Monday that they did not back the measure.

"Reports that Randy Forbes supports a 'clean' CR are not true," a Forbes said. "This was misrepresented in a story by the Virginian Pilot (newspaper), which subsequently was picked up by HuffPo and other national outlets – none of which bothered to contact our office to verify."

Instead, Forbes has introduced legislation that would fund all of the government except Obamcare, the aide said.

Not all Republicans moved away from voting for a government funding bill with no strings attached.

Late on Monday, Republican Rep. David Reichert of Washington said he would "continue to vote for any legislation that keeps the federal government open."

Other Republican members, like Rep. Mario Diaz-Balart of Florida, would not confirm a report from the Miami Herald that said the lawmaker would support a clean resolution.

"The president needs to sit down and negotiate with the speaker," Cesar Gonzalez, a spokesman for Diaz-Balart, said. "In the meantime, the congressman does not think it is wise to negotiate through the press."

[swake]

Military death benefits halted due to government shutdown.

http://www.today.com/news/shutdown-denies-death-benefits-families-fallen-soldiers-8C11355842

[Conan71]

Maybe a few more of these will get something going.  Reason's not going to do it apparently.

Poll: 70 Percent Disapprove of GOP

Poll: 63% disapprove of GOP

Not a very exacting science apparently:

A new CNN/ORC International poll shows that no one is coming out ahead in the current federal funding impasse, but Republicans are taking more heat than the Democrats.

According to the survey, 63 percent of those questioned said they were angry at Republicans, with 57 percent also angry at Democrats, and 53 percent unhappy with President Obama. Nearly half of those surveyed said the shutdown has caused major problems.



Read more: http://swampland.time.com/2013/10/08/in-new-poll-americans-blame-everyone-for-government-shutdown/#ixzz2h97Rj3Nj

[Conan71]

Military death benefits halted due to government shutdown.

http://www.today.com/news/shutdown-denies-death-benefits-families-fallen-soldiers-8C11355842

What does and does not get funded during a shut down is determined by someone, somewhere.  It's not like it happens in a vacuum.

[Hoss]

What does and does not get funded during a shut down is determined by someone, somewhere.  It's not like it happens in a vacuum.

Like bringing a clean CR to the House floor.  That evidently happens in a vac...wait.  Sorry.

[swake]

What does and does not get funded during a shut down is determined by someone, somewhere.  It's not like it happens in a vacuum.

There's a law regarding what does and does not. I've posted it before.

[Gaspar]

There's a law regarding what does and does not. I've posted it before.

[AquaMan]

Finally. A president with some balls. You guys wanted a total shutdown (slimdown). This is what it looks like.

Even so you can't afford to let your followers know how bad its going to hurt and like a true bully, you seem stunned that your victim actually hit back.

[Gaspar]

Finally. A president with some balls. You guys wanted a total shutdown (slimdown). This is what it looks like.

Even so you can't afford to let your followers know how bad its going to hurt and like a true bully, you seem stunned that your victim actually hit back.

Actually quite entertaining from a analytical standpoint.  Because closing down 17% of the government doesn't make enough impact on regular folks, it is necessary to take extraordinary steps to inflict pain on the public in order to make the case for more government. 

President Stompy Foot, does have some balls.

[RecycleMichael]

Call for a vote, Big Cheetoh.

[Townsend]

This'll win it for them:

Arizona lawmaker refers to Obama as 'De Fuhrer' on Facebook

http://news.yahoo.com/arizona-de-fuhrer-barton-obama-134942788.html

Must be swell to associate yourself with representation like this.

[nathanm]

Pro tip: before the 1980s, funding lapses didn't actually shut down the government. It was one of Reagan's attorney generals that decided the Anti-Deficiency act required an actual shut down. Try harder, please.

[Conan71]

Pro tip: before the 1980s, funding lapses didn't actually shut down the government. It was one of Reagan's attorney generals that decided the Anti-Deficiency act required an actual shut down. Try harder, please.

Try harder, Nate.  It was Benjamin Civiletti, AG under President Carter who made that determination.  Don't let your RDS glasses color your commentary.

Drawn-out fights over spending bills are nothing new for Congress. But that's where the fights used to stay: in Congress. The rest of the country didn't have to pay much attention to countdown clocks and all this drama.

"In the '60s and '70s down until 1980, it was not taken that seriously at all," says Charles Tiefer, a former legal adviser to the House of Representatives, who now teaches at the University of Baltimore Law School. In the old days, he says, when lawmakers reached a budget stalemate, the federal workforce just went about its business.

"It was thought that Congress would soon get around to passing the spending bill and there was no point in raising a ruckus while waiting," he says.

That easygoing attitude changed during the last year of President Jimmy Carter's administration. That's when Attorney General Benjamin Civiletti issued a legal opinion saying government work cannot go on until Congress agrees to pay for it.

"They used an obscure statute to say that if any work continued in an agency where there wasn't money, the employees were behaving like illegal volunteers," says Tiefer. "So they not only could shut off the lights and leave, they were obliged to shut off the lights and leave."

Civiletti later issued a second opinion with a less strict interpretation — allowing essential government services to continue in the absence of a spending bill. But even with that exception, the stakes of a legislative standoff had been raised — which could be why lawmakers suddenly got serious about making deals.

http://www.npr.org/2013/09/30/227292952/a-short-history-of-government-shutdowns

[nathanm]

I read '81 was the year of the change, so blamed Reagan's AG. That's not the point, though. The point is that talking about a pre-1980 "shutdown" is silly. And IIRC, the 3 or 4 mini-shutdowns on Reagan's watch were no more than 3-4 days and always included a weekend, so those don't really set any useful precedent. The only good precedent we have is the shutdowns under Clinton, after which there were a spate of Anti-Deficiency Act complaints that seem to have appropriately chastened the executive branch.