Why The US Government Has 'Shut Down' And How It Will Affect You

If you have been paying any attention to the news for the past few weeks, you may have heard about the possibility of the US government 'shutting down.' At 12:01 am on October 1st, that possibility became a reality. So what led to this momentous event and how will it affect your day-to-day life? Read on . . .

Every year on September 30th, the US Congress votes on a budget to fund government programs. Normally, it is just an automatic vote that passes without much debate. However sometimes there are issues either relating directly to the budget or major policy changes that the Republicans and Democrats do not agree on. This of course only happens when the House of Representatives and the Senate, the two Chambers that make up the US Congress are dominated by different political parties.

This is precisely the situation currently. The current Congress comprises of a Republican-dominated House and a Democrat-controlled Senate and White House. In dispute here, is President Obama's Health Care Reform Act or 'Obamacare' that the Republicans are vehemently opposed to.

So on Friday, September 20th, instead of voting on a continuance of the budget, the House Republicans voted 230-189 to pass the CR only if Obamacare was defunded. This of course was not acceptable to the Senate Democrats or President Obama. So on September 27th, just three days before the deadline, they voted for an extension that would provide temporary funding for the government until mid-November, so that negotiations could continue if . . . . Obamacare remained as is.

With the ball back in their court, the Republican-dominated House worked all weekend to come up with a palatable solution and returned with a CR that contained two amendments - One, to delay Obamacare for a year and the other to repeal a medical device tax that would be implemented to help fund the Health Care act.

This sent the Senate Democrats scuttling back to the drawing board. But as had been expected, they refused to budge, insisting that the House Republicans approve a 'clean' bill, one that deals solely with the budget issue, without attaching any conditions. Of course, by this time, the looming deadline had passed and at 12.01 am on October 1st, the US government officially shut down.

In case you are wondering what the Senate meant by passing a 'clean' bill and what if anything Obamacare has to do with the day-to-day budget of the country, the answer is, not much. The Republicans are just using it as a bargaining chip because they believe it not only causes Insurance premiums to rise, but also, hurts the quality of healthy care. According to their estimates if passed, the act will result in $570 billion USD in tax hikes and add over $500 billion USD to our already high debt, something the country cannot afford.

In their defense, the Democrats say that the law will not only provide more people access to healthcare, but also, rein in the rising costs. Not only that, people with pre-existing health conditions will now be able to get health insurance, something that is extremely difficult to do currently. Also, those that have insurance will now no longer have to indirectly pay for those that don't.

So who is right? Given that the true cost and impact of a big plan such as this can only be realized after it goes into effect, it is hard to tell. The irony of it all is that a government shutdown will probably not impact the President's bill since most of the money comes from new taxes and fees and from cost cutting measures in programs like Medicare that continue to operate as usual even during the shutdown.

So what does this shutdown mean for the American people? Well for one while it is being dubbed as a government shutdown, some areas keep operating as normal. This means that essential workers like air traffic controllers, military personnel and law enforcement officers will continue going to to work. Also allowed to operate if they can pay themselves using the fines and fees they have collected, are federal courts.

People working at non-essential services like national parks, federally owned museums like the Smithsonian, overseas passport offices that give visas to people that plan to come to the US and IRS call centers that assist tax payers will all be furloughed. This means that they may receive no back pay for the time they are forced to take off.

And while this whole thing may sound dire, it might not be as bad especially if the two parties agree quickly. However, if the shutdown continues for a few weeks, then there may be an impact on the already weak US economy.

While it has been a while, this is not the first time the government has suffered a shutdown. It happened for two consecutive years in 1995 and 1996 when Democratic Party leader President Bill Clinton was President - the first one lasted five days, the second, a full 21 days. The issue? A conflict between the two parties over spending on Medicare, public health, education and the environment! Sounds familiar, doesn't it?

Once this is resolved, the two parties will gear up for an even bigger battle - Raising the debt ceiling, which has to be addressed by October 17th. A consensus on that is even more crucial because while the US budget is an internal issue, an impasse on raising the debt ceiling would mean that the US Government would default on its obligations not just locally, but also internationally, leading to global repercussions.

The last time the two parties argued over the debt ceiling was when President Obama was starting his second term in January of 2012. Fortunately, both parties were able to reach a compromise at the last minute and avert a crisis. But for that discussion to even begin, the government shutdown has to first be resolved. Hopefully, the two parties will set aside their differences soon and do what is best for the American people!

Resources: CNN.com,news.yahoo.com, LAtimes.com, monitor,com