The government’s shut down (well, sort of). From politicians to pundits, everyone’s squawking, but no one is doing a particularly good job explaining what the heck actually happened. I hear “continuing resolution” and “debt ceiling” being thrown around, and apparently they’re not the same thing? I took American Gov and I paid attention, but this thing is just a mess.
In my attempt to be a decent citizen, I figured educating myself was the least I could do.
GOP conservatives never liked Obamacare, so they held a meeting shortly after Obama was elected for a second term to see what they could do about it. Led by former Attorney General Edwin Meese III, he and other high-profile conservative leaders signed a coalition letter declaring their intent to defund Obamacare before it was “too late.”
This plan finally came into effect on Friday, September 20th, when the House, led by Speaker John Boehner, voted for a “continuing resolution” (more on this in a minute) that included a provision to eliminate all financing for the Affordable Care Act (Obamacare’s legal name). A couple days later while the bill moved through the Senate, we got to hear Republican Senator Ted Cruz talk for 21 hours and 19 minutes about how Obamacare “takes our freedom away,” with some side anecdotes about White Castle burgers and Dr. Seuss’ Green Eggs and Ham. Then, a week after the House vote, the Senate having “considered” the bill, threw it back to the House with the defunding provision removed.
They went back and forth a couple more times, the House tacking on a defunding measure, the Senate sending it back without the defunding measure, and then it was October 1st, and the government shut down.
So what’s a continuing resolution and why is it important?
A Continuing Resolution
While it’s the President’s job to submit a budget proposal by the first Monday in February, it’s up to Congress to actually agree upon said budget and then spend the money. Theoretically, each year both houses must pass a dozen appropriations bills by October 1st that the President agrees to sign.
But this is Congress we’re talking about and it’s hard to agree on things, so a continuing resolution basically allows the government to keep funding its departments, agencies, and programs for a limited time in the amount that was already agreed upon from the previous budget. This way, representatives can work out their differences and pass a “real” spending bill. It’s kind of like two-step verification: Congress has to vote on the budget and agree to spend $620 million dollars on the Department of Defense, but then in order for the DoD employee’s (AKA most of the military) to actually get paid, Congress needs to specifically “appropriate” the funds. And just to give you some perspective: Congress hasn’t passed a balanced budget since 2001. We’ve had almost 50 CRs since then.
There are those hoping that the House will pass a “clean” CR—which essentially means a continuing resolution without an added policy change (like the provision defunding Obamacare)—but I’m not gonna hold my breath.
So, then what the heck is the debt ceiling and why does it feel like the same thing? Well, it turns out that it’s just one big coincidence and some really bad luck that our current budget expires on October 1st and we will hit the debt ceiling on October 17th.
The Debt Ceiling
The debt ceiling (or the debt limit) is basically a cap on the amount of money issued by the Treasury. First used in 1917, the idea was that a limit would help keep the President accountable for the money he spent (which in practice may not be true.) Raising the debt ceiling simply allows the government to borrow money from itself to pay for the things it’s already bought.
The key thing to remember is that the government has already spent the money. It’s like having a $200 credit card bill and only $187 in your bank account. The government gets to borrow the extra $13 dollars from itself by “raising” the debt ceiling. If we default (AKA we don’t raise it), it means we’re not paying our bills.
But this should not be confused with the budget deficit: the budget deficit subtracts the cost of running a country from the revenues it brings in each year. In 2013, the government spent $3.803 trillion, but only made $2.902 trillion leaving us a deficit of $901 billion. Our nation’s debt takes into account the previous deficits, which currently amounts to about $16.7 trillion.
To Sum Up
The GOP wanted to take a stand against Obamacare and, according to New York Magazine, they were originally going to do this with the debt ceiling, but switched gears after Ted Cruz’s stunt and went from threatening a default to shutting down the government instead. The government is shut down (which costs money) because the House and the Senate could not pass a continuing resolution and this display of “non-bipartisanship” has, thanks to bad timing, put us on the precipice of defaulting as well.
And that, my friends, is politics.
Extra Credit: While January 1st used to be the beginning of each fiscal year, in 1842 for reasons unknown, they changed it to July 1st, a date that was again moved in 1974 to our current due date of October 1st.
Photo by Remi Coin