Political crisis, economic crisis, or something else?

Wednesday, 9. October 2013     0 comment(s)
Anna Kronlund
Senior Research Fellow - The Global Security Research Programme

Members of Congress have lately called for a return to regular order.

The shutdown of the US government and the need to raise the debt ceiling by mid-October have dominated US news lately. Congress failed to meet the deadline to pass a budget before the beginning of the new fiscal year and the US is now facing the second week of a government shutdown. According to Secretary Jack Lew from the US Department of the Treasury the following deadline for Congress is to agree on raising the debt ceiling before mid-October (October 17, 2013). The current debates are traceable to what happened in 2011 when Congress and President Obama agreed on the debt ceiling and sequesters as part of the Budget Control Act of 2011. The main contrast between the parties seems to revolve around the basic difference in views of what government is expected to do. The recent debates also indicate a lack of bipartisanship, working across party-lines in Congress.

In the last two weekly addresses and a news conference of October 8, 2013 President Obama has urged Congress to act: to agree on government spending, to end the shutdown and to raise the debt limit. In the current situation of divided government, for the legislation to pass it must gain support from both parties. The US House of Representatives passed a Continuing Appropriations Resolution (H.J.REs.59) mostly with party-line votes of 230 to 189 (two Democrats voting aye and one Republican voting no) on September 20, 2013. The Senate passed its own version of the bill, without the Affordable Care Act provision by a vote of 54-44 on September 27, 2013. The Senate has further tabled amendments to the resolution passed in the other chamber, including e.g. the delay of the individual mandate of the Affordable Care Act by one year. The Senate also tabled the House request on the Conference committee. As a result, the House has taken a piecemeal approach to funding the government and passed several smaller funding bills. A "clean resolution” seems to be the most likely option, because that the Senate Democrats would pass or President Obama would sign anything that challenges the Affordable Care Act or its implementation is a rather improbable option. Despite the gridlock situation, Congress has agreed on the "Pay our military Act” that President Obama signed on September 30, 2013.

Members of Congress have lately referred to the necessity of returning back to the regular order to pass the budget and the appropriation bills on time before the beginning of the new fiscal year. Both chambers have passed their own budgets but the lack of conference where the differences between the two bills would be settled has prevented an agreement on it. Of the 12 appropriations legislations (covering the discretionary spending) four have passed the House but none has become public law. As stated in Congress regarding to the debate on H.J.Res.59, Congress should look forward rather than passing continuing resolutions: "We are governing this country by looking backwards. We have a responsibility to make decisions”, Representative Pete Visclosky stated (D-IN, Congressional Record September 20, 2013, H5777). Rather than "kicking the can down the road” both parties seems to agree that Congress should act to fulfill its constitutional responsibilities. For example Senator Johnny Isakson (R-GA) noted that "There is a bipartisan responsibility for not having a budget or an appropriations act” (Congressional Record October 7, 2013, S7249). 

The power of the purse is considered to be one of the most important powers of the US Congress and it is included and detailed in the first article of the Constitution. The focal provisions of the US Constitution in respect to authorizing government spending seems to be: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” (US Constitution Article 1, Section 9) And that "the Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; "To borrow Money on the credit of the United States”; and "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” (US Constitution Article 1, Section 8) Congress has the power and responsibility to pass the budget and raise the debt ceiling.

President Obama has repeatedly stated that he is not going to negotiate on raising the debt ceiling. In his recent statement President Obama emphasized that he is willing to discuss with the Republicans their concerns on policy matters and budget but that "members of Congress, and the House Republicans in particular, don’t get to demand ransom in exchange for doing their jobs”. The real challenge that could result in an economic crisis and even the default on the debt is the question of raising the debt limit. A default has never occurred in the US history. Congress has acted, however, to avoid a default on debt before. Since the 1960s Congress has acted 78 times to avoid a default and of these 49 occurred under Republican presidents, as Senator Jack Reed stated on the Senate floor (D-RI, Congressional Record October 5, 2013 S7241). What seems to be currently the core question is whether or to what extent are the debates on government shutdown linked to the debates on raising the debt limit? And is it possible to find an agreement on the pending questions that suits the president and both parties, in a situation where instead of discussing government spending and the raising of the debt limit, the debates focus on the Affordable Care Act, the size and functions of the government and the lack of leadership in US politics?

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