Monday, April 4, 2011
Government shutdown looms as congressional budget talks stall
Obama made two separate phone calls urging these US leaders to reach a resolution to avoid a government shut-down. The White House reports that Obama conveyed to both Boehner and Reid that a closure of the government would the “harmful to our economic recovery.”
This intervention marks a slight shift of the strategy from the White House in the fight over a plan to fund the government through 2011. Up until these phone calls, Vice President Joe Biden and Budget Director Jacob Lew were the lead men in working towards brokering a deal between the House Republicans and Senate Democrats, as Obama kept his distance.
With just a few days to go to get a budget into play, President Obama says he was encouraged by an agreement to reduce spending by roughly $73 billion from his proposed budget, with $33 billion reduced from currant spending levels. Republicans say that no such deal has been made.
Boehner’s spokesperson, Michael Steel said on Saturday, “The speaker reminded the president that there is no deal or agreement on a final number, and he will continue to push for the largest possible spending cuts.”
The budget deal needs to happen or another stopgap measure needs to be put in place within the next few days to stop the doors of many government offices closing.
What a closing down of the government might look like:
The plan is for the IRS to stop processing tax returns and stop refunds on April 8th, if Congress cannot agree to a plan or avert a halt of the government. The plan set forth in October called for the IRS to continue depositing the checks paid to them, but stop processing the refunds owed to the US citizens, according to Bloomberg’s interview with Commissioner of IRS. So the IRS will take, but not give in a shut-down mode. Again, this is the plan worked out in October when another government shut-down was looming.
Other closings would be the operations of national parks, the processing of many permits, work at Superfund sites, and work by many federal contractors.
If a government shut-down does occur, the government would continue to fund national security and jobs that protect the safety of life and property, as well as air traffic control, law enforcement, food and drug inspections, and the care of people in federal custody.
A day or two of a shutdown, especially if it happens over the weekend, will not present too much impact on the nation, but each day the shut-down continues, the impact grows. A government shut-down will cost more than $100 million a day, according to Bruce Yandle, a professor with George Mason University. “The longer it goes on the more unbearable it will get,” said Yandle. He also said that a government shut-down would be an eye opener for the nation’s citizens about how extensively the federal government is involved in all aspects of life. This sounds as if a government shut-down goes on for any length of time it will pose a hardship.