United States Government Shutdown – Day Two.

October 2, 2013 Capital Digs In for Long Haul: Congress, Obama Prepare for Siege Over Shutdown, Then Debt Ceiling. Pictured above, U.S. President Barack Obama delivers remarks in the Rose Garden of the White House on Tuesday.

Lawmakers and the White House dug in Tuesday for a long fight as the first federal government shutdown in nearly two decades showed no signs of breaking, increasing the likelihood it will become entangled in an even larger battle over the Treasury’s ability to pay the government’s bills.

The two parties held no negotiations to resolve the impasse, instead trading blame. Republicans criticized Senate Democrats as being unwilling to negotiate an end to the standoff that forced federal agencies to curtail a range of activities and begin the furlough of more than 800,000 workers.

U.S. stocks rose despite the government shutdown as investors said it would take a prolonged halt to rattle Wall Street.

President Barack Obama pointed the finger at House Republicans for their efforts to scale back or dismantle the 2010 health law, the Affordable Care Act. “They’ve shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans,” Mr. Obama said from the White House Rose Garden.

House Speaker John Boehner (R., Ohio) pinned the blame on his adversaries, saying, “Senate Democrats today slammed the door on reopening the federal government by refusing to talk.”

House Republicans launched a new strategy aimed at increasing pressure on Senate Democrats to negotiate with them, only to see it fail in their own chamber Tuesday night. GOP leaders brought forward a series of short-term bills to finance small parts of the government, including veteran’s services and national parks, through Dec. 15.

None of the bills garnered the two-thirds support needed under an expedited process chosen to highlight House Democrats’ unwillingness to fund the popular programs under the Republican plan. GOP lawmakers said they might bring up the bills again later this week in a fashion that would make them easier to pass with just the Republican majority.

The lack of negotiations between the two parties and the White House raises the possibility that the partisan divisions that have brought the government to a standstill could impede the ability of the Treasury to pay the government’s bills beyond mid-October. Congress has to approve an increase in the federal debt ceiling by then, and failure to do so could bring broader and more troublesome consequences for the U.S. and global economies than the partial government shutdown.

Pictured above, Workers erected a barrier around the Lincoln Memorial on Tuesday as the government shutdown closed national parks, curtailed the work of federal agencies and put more than 800,000 employees on furlough.

“The sad news is that, given the performance to date, that the debt limit extension is coming up in two weeks, and this does not portend responsible action on the debt limit,” said House Democratic Whip Steny Hoyer (D., Md.).

Added Sen. Richard Shelby (R., Ala.): “Every day we are here, the calendars are running together.”

The shutdown was sparked because Republicans were determined to scale back the Affordable Care Act before the insurance marketplaces opened. The GOP-led House refused to fund federal agencies for the new fiscal year, which began Tuesday, without attaching provisions to delay the health law or otherwise curb its reach. The Democratic-controlled Senate rejected each of those efforts.

The Senate also rejected on Tuesday a House measure, approved in the early hours of Tuesday morning, that the two chambers assign a small group of lawmakers to resolve the budget differences. That measure also included curbs on the health law, including a one-year delay in its requirement that individuals carry health insurance.

The idea of passing a series of narrowly tailored spending bills was floated by Mr. Boehner at a closed-door strategy session with rank-and-file lawmakers. Republicans said it showed their interest in trying to blunt the effects of the shutdown.

“It’s going to get the aspects of government open that I think most people are concerned about and, along the way, it’ll signify to the American people that we’re serious about keeping the government open,” said Rep. Matt Salmon (R., Ariz.).

But Senate Democrats rejected the strategy, saying their goal was to reopen the entire government. “People shouldn’t have to choose between help for our veterans and cancer research,” said Sen. Charles Schumer (D., N.Y.). Senate Majority Leader Harry Reid (D., Nev.) called it “another wacky idea” from the GOP, and said: “If they think they’re going to come and nitpick us on this, it won’t work.”

The idea echoed a proposal floated in the past week by Sen. Ted Cruz (R., Texas) to pass individual spending bills in an effort put pressure on the Democratic-controlled Senate.

Some centrist Republicans showed fresh anxiety about the GOP strategy of allowing the government to shut down rather than abandoning the party’s demands for Democrats to agree to changes to the health-care law.

Rep. Scott Rigell (R., Va.) said he now wanted GOP leaders to end the spending standoff and pass a bill shorn of health-care riders.

He said he worried about the “economic pain” from the shutdown and concluded that “the wiser path was to recognize that the time had come to fund the government fully.”

Other Republicans—including Mr. Boehner himself, in the past—have favored waging their fight for major changes in the health-care law not as part of the short-term extension of government spending but on the coming debt-limit fight.

House Budget Committee Chairman Paul Ryan (R., Wis.) on Tuesday cited the debt-limit bill as the most likely vehicle for negotiations over broad debt-reduction initiatives. “That’s what we think will be the forcing mechanism” to craft a deficit-reduction measure later this year, he said at a news event called to focus on the government-funding standoff.

The White House and Senate Democrats have refused to negotiate conditions for Congress passing the debt limit, saying Congress had a responsibility to allow the Treasury to pay bills that lawmakers had already incurred. “This is not a concession to me,” Mr. Obama said Tuesday. “It is not some demand that’s unreasonable that I’m making. This is what Congress is supposed to do as a routine matter.”

However, White House officials signaled that Mr. Obama would negotiate with Republicans on their broader budget concerns and possibly some tweaks to the health-care law if Congress approved a temporary extension of government funding and debt-limit increase to give officials time for talks. Details of how such an agreement would work were unclear.

One official said the White House would like, in particular, to address broad budget cuts known as the sequester, but also said there are some tax issues on which Mr. Obama and Republicans could reach a compromise. (Credits – By Janet Hook, Kristina Peterson and Carol E. Lee for the WSJ; Getty Images).

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