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Government Faces Imminent Shutdown

Stop the presses – Congress is, yet again, at an impasse about the national budget and it appears as if this time it will consequently shut down the federal government unless lawmakers can come to an agreement by September 30.

Courtesy of www.cnn.com
Courtesy of www.cnn.com

There are two main issues at hand. Funding for the government for the 2014 fiscal year (beginning on October 1, 2013) must be decided by Congress by September 30. However, lawmakers have had a difficult time passing the appropriations bills required. Adding to this complication is the fact that the government is about to hit the debt ceiling (the debt ceiling is the legal limit on how much total debt that the government can assume) and the decision to raise or lower it, and thus let the Treasury borrow more or less, is highly contested between Republicans and Democrats. The debt ceiling debacle, though, is far more consequential because it has the potential to affect world markets negatively.

Agreements between Republicans and Democrats seem unlikely at the moment. House Republicans in particular have taken the hard line in the past few days and it looks like their demands will not find an easy compromise among Democrats. According to the Washington Post, House Republicans are taking on a “risky, double-barreled attack on President Obama’s healthcare law” and making it the center of the budget debate. In effect, Republican leaders–particularly Speaker John Boehner–told the media that they would put forward a stopgap government funding bill that would block funding to Obamacare. This is in response to many conservatives who are still demanding that Obamacare be halted. This stopgap bill will be put to a vote on Friday, but it is likely to be met unfavorably with Democrats.

Another initiative by Republicans, this time regarding the debt ceiling, will also target Obamacare directly. In order to lift the debt ceiling, Republicans are demanding that the healthcare law be delayed, as well demanding as other measures such as an overhaul of the tax code and an approval of an energy pipeline.

Needless to say, Democrats are aghast at what Republicans are demanding and the issues seem to point to a battle of wills that will force a government shutdown. In addition to Republican demands making compromise between the two parties highly unlikely, it seems doubtful that Democrats will extend an arm to help as they know that public opinion is strongly against Republicans in this matter. According to a poll taken by CNN, most Americans (51%) would blame the GOP should a government shutdown occur, thus strengthening Democrat popularity and electoral prospects. According to the poll, only a third would blame Democrats.

At the moment, the best possibility to avoid government shutdown by the deadline is if Senator Reid sends back the stopgap bill to the House, stripped of its demands to defund Obamacare. Then the hot potato would be placed again in Speaker Boehner’s hands to either approve the measure with Democratic votes or else to shutdown the government. This, however, does not seem likely.

Recently, congressional budget decisions have taken a pattern most familiar to college students: wait until the last minute before the due date and then patch together a final document. In this instance, it looks like Congress’ current debacle is no different.

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Congress Scrambles to Prevent Sequester

On Capitol Hill, lawmakers are busy trying to prevent the sequester, massive spending cuts totaling to roughly $85 billion this year and over $1 trillion over the next ten years, that will hit the federal budget on March 1.

Courtesy of ivn.us
Courtesy of ivn.us

Should lawmakers fail to prevent the sequester, it will lop off a good portion of discretionary spending for defense and domestic programs and will also affect some mandatory domestic spending (most notably Medicare.) No programs will be eliminated, but all will be considerably scaled back.

The sequester will also affect federal employment. According to a Washington Post article, about 800,000 employees at the Pentagon will be put on unpaid leave if Congress cannot obtain a solution to the sequester. Military members and their families will also face cuts to benefit programs. Economic growth in the United States is also expected to slow and unemployment will raise a quarter of a percentage.

The sequester is the result of the debt ceiling crisis in the summer of 2011. It was intended to be an incentive for Congress to come to an agreement to cut federal spending, however, no agreement was ever reached. Originally, the sequester was supposed to take place in the beginning of this year (during the fiscal cliff crisis), but Congress made a deal to prevent the cliff and the sequester was delayed for another two months.

Nobody in Congress is pleased with the situation; neither the Democrats nor the Republicans can agree on how to best prevent the sequester.

President Obama and the Democrats are suggesting that the best way is to increase taxes. Obama has advocated for closing tax loopholes and increasing tax rates for the wealthy. The Democrats in Congress are pushing for tax increases, spread out over the course of a decade, and they are also recommending other measures such as cutting farm subsidies and tax subsidies for oil companies.

Republicans, on the other hand, do not want to raise taxes at all and thus find themselves not able to agree with Democrat proposals. Republicans are also very concerned about defense spending being cut, more so than domestic spending, and are pushing for considerably large domestic spending cuts instead. In an article in the Wall Street Journal, Speaker of the House, John Boehner, wrote, “The president’s sequester is the wrong way to reduce the deficit, but it is here to stay until Washington Democrats get serious about cutting spending. The government simply cannot keep delaying the inevitable and spending money it doesn’t have.”

Overall, the sequester is another issue in the long debate over the size and role of the federal government, with the Democrats on the side of an expanded government and Republicans on the side of a smaller government. The results of the sequester that arise within the next week should be a test case to the larger debate. Hopefully, though, Congress will find a compromise to the sequester that is appealing to both political parties and will secure the future of American defense and overall well-being.

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Next Up in Congress: Immigration Reform?

During the State of the Union Address on Tuesday, President Obama spoke on the topic of immigration reform, saying, “Send me a comprehensive immigration reform bill in the next few months, and I will sign it right away.”

Courtesy of bigthink.com
Courtesy of bigthink.com

During his speech, Obama mentioned three things that he wishes in an immigration reform package. One, he desires to continue to increase border security; two, he would establish “a responsible pathway to citizenship” for illegal immigrants already here; and three, he would reform the process of legal immigration so that there would be fewer waiting periods and would attract those that would help create jobs and help to grow the economy.

This was not merely talk. In recent weeks, comprehensive immigration reform has been steadily approaching legislative reality. A bipartisan group of senators, four Democrats and four Republicans, was formed only a few weeks ago with the task of developing a framework for reform that could possibly develop into a bill. This group has spearheaded the effort to come up with solutions to the many problems of immigration in this country – namely, illegal immigration, undocumented workers, insecure borders, and problems with the process of legal immigration, along with other issues.

For once, this seems to be a movement that will receive much, if not total, support in Congress. Both Democrats and Republicans agree that immigration reform makes economic sense as immigrants are a key part of economic growth and development. Given the current economic uncertainty, immigration is a vital issue to address. The GOP also seeks to broaden its base, especially after the last presidential election where most of the Hispanic vote went to President Obama. Offering solutions to the immigration problem and presenting themselves as open to discussion will help develop support for the GOP platforms.

The public has also demonstrated consistent support for immigration reform. According to a Gallup poll, more than seven in ten Americans support a path to citizenship for undocumented immigrants and more than eight in ten Americans support legislation that would require that all employers verify that their employees are living in the United States legally.

Efforts to reach across the aisle and compromise about immigration also seem to be gaining ground, particularly from Senator Marco Rubio (R.-FL) who is quickly becoming a GOP superstar. Rubio, the son of Cuban immigrants, has been consistently leading the effort on behalf of the GOP to get discussion going. However, a hurdle that must cleared for legislation regarding immigration is a pivotal controversy within the Republican Party itself.
There are a significant number of GOP members who do not wish a pathway to citizenship for illegal immigrants, saying that it amounts to amnesty. There are others within the party that disagree. Rubio dodged this issue in his speech in the GOP response to the State of the Union Address on Tuesday evening, but in recent weeks he has shown his support for a process of citizenship for undocumented immigrants.

The United States may well be on its way to immigration reform within the coming weeks. As talks and discussions among Congress become more serious and legislation begins to develop, the United States may even be implementing new immigration reform by the next State of the Union Address in 2014.