Lizzie Roberts examines the consequences the US government shut-down has had, and the potential future effects.
On Wednesday afternoon, we finally saw the light at the end of the tunnel for the US government shut down. It was announced in the Senate that a fiscal deal was made to raise the debt limit and in turn reopen the government. John McCain took to the floor stating that “we are now seeing the end…” Though, this still needs to be passed in the House of Representatives, it is expected to go through with the backing of a small group of Republicans who are joining with President Obama. However, all that has gone before this deal in the last few weeks cannot be overlooked and it is important to assess why this shutdown occurred and the repercussions it will have.
John McCain took to the floor stating that “we are now seeing the end…”
The American government has been shut down for 16 days, with 800,000 people losing their jobs and countless others not being paid for nearly 3 weeks. On Tuesday night, Republicans rejected calls from their leadership to put through a proposal, which would have reopened government. In difficult situations like this, it is easy for parties to place all blame on the opposition. However, the evidence is overwhelming that the Republicans were the main culprits in preventing an end to this growing national and possibly international problem.
The source of the original disagreement causing Congress to be at loggerheads and prevent the budget being passed mainly centres upon Obamacare. The House of Representatives, controlled by the Republicans, passed a spending bill that did not implement the Affordable Care Act. The democratically-controlled Senate however argued it must be fully funded by government and rejected the bill. The Republicans refused to budge on the issue, resulting in the shutdown.
Almost three weeks on, Congress was at a stalemate. Until yesterday, negotiations between high ranking politicians in both parties proved fruitless. They were unable to find a solution to the proposed deal raising of the debt ceiling and reopening government.
Until yesterday, negotiations between high ranking politicians in both parties proved fruitless.
The urgency to reach a deal became even more prominent within the last few days after the rating agency Fitch warned the US may lose their Triple-A status. The agency stated that the disruption and lack of compromise in Washington “risks undermining confidence in the role of the US dollar as the pre-eminent global reserve currency”. The correlation between this warning from Fitch and the swift deal may be more than a coincidence.
Congress was cutting it extremely close to the deadline, they only had till today to reach an agreement, if this was not met they would have defaulted on their debts; this has never been done in history. According to the US Treasury Secretary Jack Lew, government has been using “extraordinary measures” to pay their bills since May and these means will be at their limit by October 17.
Politicians and civilians alike will be concerned about the repercussions to the economy following the shutdown of 16 days, but the 2014 Midterm elections may be of greater unease to those politicians up for re-election. A poll released Tuesday by the Washington Post has indicated it is the Republicans who should be most anxious about their current positions, showing that 74% of Americans “disapproved in the way Republicans are handling the on-going dilemma.” This was undeniably to Obama’s delight as this figure is far higher than the disapproval shown toward the President (53%) and the Democrats (61%).
74% of Americans “disapproved in the way Republicans are handling the on-going dilemma.”
It will be interesting to watch the next few days develop in America. This situation has been testing the bipartisanship in Congress, but it is even more important to question how this stalemate will have affected the world economy. The government shutdown will undoubtedly have a significant effect on America in the following months, but the consequences it has on the 2014 Midterms will be even more fascinating to watch unfold.
Lizzie is a second year History and Politics student at Lancaster University, with a strong passion for American politics, equality and good old British sarcasm.