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148588 tn?1465778809

Why a government shutdown could be a pricey proposition

http://nbcpolitics.nbcnews.com/_news/2013/09/27/20723289-why-a-government-shutdown-could-be-a-pricey-proposition?lite


"If past is prologue, a looming government shutdown could actually cost U.S. taxpayers money.  A lot of money.

According to the Office of Management and Budget, the two shutdowns in 1995 and 1996 cost taxpayers $1.4 billion combined. Adjust for inflation and you've got $2 billion in today’s dollars.

Those two shutdowns lasted a total of 27 days, but there’s no telling how long the government could be shuttered this time around if Congress fails to act by Monday at midnight. Even shorter shutdowns have proven successful at draining government funds.
In the immediate aftermath of the first government shutdown in 1981, the most conservative estimate  – conducted by the General Accounting Office (now called the Government Accountability Office) -- put the cost of shutting the government down for a single day at $8.2 million, or almost $21 million in  today’s dollars. A House panel later concluded that the day-long furlough cost taxpayers 10 times more than that.

“Past shutdowns have disrupted the economy, and this shutdown would as well,” President Barack Obama said at an address at the White House on Friday. “It would throw a wrench into the gears of our economy at a time when those gears have gained some traction."

It  may seem counter-intuitive that pressing the pause button on the federal government’s operations could come with such a hefty price tag … so why does it take so much cash to keep the government’s lights off? And why do estimates vary so widely?

First, there’s the actual mechanics of preparing for a shutdown, like alerting staff of procedures and preparing to secure files and facilities.  For example, during the first five day shutdown in 1995, the Labor Department alone spent almost $12,000 on postage, printing and paper for furlough notices. The Treasury Department calculated the cost of developing contingency shutdown plans at just over $400,000.
That process – and some of the costs associated with it – is already underway days or even weeks before a shutdown deadline, whether the crisis is averted or not.

“Those costs begin to be incurred now, when the debate is still going on,” said Bruce Yandle, a professor of economics at Clemson University who served as the executive director of the Federal Trade Commission during the Reagan Administration. “It’s what employees are already discussing around the water cooler. It’s already affecting decisions being made by management.”
The impact of a brief shutdown – or even just the threat of one – for government contractors can also mean higher costs for federal agencies in the future, although it’s almost impossible to assign a dollar amount, says Roy Meyers, a political science professor at the University of Maryland Baltimore County and a former CBO analyst.

“It can reduce the profits of the contractors,” says Meyers. “And the next time they consider working with the federal government, they count that as a risk, and they charge more.”

That impact could be felt acutely in the Washington, D.C., area, where many contractors are based. And that could be compounded by the impact on tourism in the District as federally-funded museums and monuments are shuttered. The shutdowns of the 1990s cost the District of Columbia an estimated $50 million in lost business and cancellations, officials said at the time.

There’s also the issue of back-pay for furloughed workers. While only those workers deemed “non-essential” would stay home during a shutdown – about 40 percent of the federal workforce during the mid-1990s  –  there’s a precedent for lawmakers granting those individuals their pay once the government is back up and running, even though they weren’t producing any work.

Cost estimates must also factor in delays in the collection of fines and fees typically gathered by federal agencies.
OMB said after the twin shutdowns in 1995 and 1996 that $2.2 billion worth of licenses for U.S. exports were delayed and that some $60 million in environmental fines and settlements were not collected or negotiated.Most of those fees eventually get collected, says Yandle, but the delays and the inconvenience to businesses and consumers can end up having resonance that won’t show up in cost estimates at all.

“Those costs that cannot be estimated are often much more important than those that can,” he said.  

Meyers argues that a shutdown’s cost to the budget or the effects on the overall economy estimates – flawed as they may be –  pale in comparison the societal cost of a government that seems bent on playing political chicken rather than focusing on solving problems.

“The real costs are really not in terms of consumer confidence or any of the standard measures in macroeconomics or even the federal budget,” he said. “The real costs are in trust in government and belief that government officials are paying attention to the real issues of the country.”

11 Responses
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Avatar universal
Warren is a smart lady and a great speaker.  I wish I could drum up a bit of her optimism right about now.  I'm sure one way or the other that we will all survive this but watching this slow motion train wreck leaves me pessimistic.

I am waiting for a leader to jump up and lead us out of this quagmire, but it isn't happening.  A group of leaders would be better, but we sit at this stand still....  

This little shut down is doing a real number on the town that I work in.  We are 45 miles from Yellowstone and Grand Teton National Park is literally right out the back door (13 miles officially, to the front gate) and we normally have 20 bus tours a day through here.  Not now... People from Asia and Europe who've planned these trips for a long time are now being driven around the perimeter of the parks and skipping some of their scheduled stops.

I don't think the government gives a damned.
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Avatar universal
http://youtu.be/JTxWMkW8s_c

This is not so much about the cost of the shutdown but since it is a thread about the Gov't shutdown I will post this link here.
I really like Elizabeth Warren, she gives me a semblance of hope.
We have had a lot of discussions on the board about how involved government should be in our lives and I have often agreed with the folks who are more to the right on this issue with some exceptions.
I do not think gov't should be taking ppls guns away nor do I think gov should be involved in our reproductive and medical rights. I most certainly do not want them telling us who can marry and who cannot and so on.
However I believe the gov has a responsibility to protect and serve the people and when I say I support less gov't it does not mean no FDA or OSHA , it does not mean cuts to education and medical care. I will agree that some things need to be fixed but that does not mean throwing out government regulations.
I like Warren because she takes me from the anger I feel for our Gov't and clarifies the situation for me and reminds me that if we are going to have a democracy we must not, we absolutely must NOT give up our optimism and idealism.
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Avatar universal
So, its costs us a fortune to run the government and it costs us a fortune when the government is shut down?  That's about right... what a country.
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Avatar universal
I think I heard 300 mil a day to keep us in shutdown mode. ?????? Told to us by the very people that have us running up that tab? Ironic?
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Avatar universal
Perhaps not normal but more along the lines of the "new" normal.  Nothing any of these people do is normal.  They can't have civil conversations.... this is one of the damned entry level needs... the ability to communicate.

And, they need to learn the definition of the word communicate.  Part of communicating is listening.  Another part is understanding.  They all have the talking down pat.  Put a camera near any politician and they will stumble all over themselves to say something ridiculous.
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Avatar universal
http://billmoyers.com/2013/09/30/shutdown-imminent-how-he-said-she-said-reporting-helped-bring-us-to-the-brink/
"With a few notable exceptions, the media have framed what Jonathan Chait called “a kind of quasi-impeachment” in typical he said-she said fashion, obscuring the fact that the basic norms that govern Congress have been thrown out the window by a small cabal of tea party-endorsed legislators from overwhelmingly Republican districts. The media treat unprecedented legislative extortion as typical partisan negotiations, and in doing so they normalize it.

But it’s not normal. Republicans are demanding that Democrats unwind their signature achievement – a piece of legislation that took 18 months to pass, survived a Supreme Court challenge and a presidential election – in exchange for a stopgap budget resolution. On Saturday, they tacked on a provision that would limit access to contraceptives."
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317787 tn?1473358451
Thank you for all of this information. Really interesting.
As we know the govt did shut down
I am really worried.  Normally the Supreme Ct and the research bases stay open when the govt shuts down, not this time

I may be way off base here however today is Saturday I went to the grocery store, they were out of milk.. Odd for a Saturday.
I also could not get my prescriptions filled as the pharmacy was out of medicine, did not know what it would be delivered.

I wonder, is this the beginning of a larger problem? Is this the effect of the sequestor , furloughs and govt shutdowns starting to lower our food supply?
I am hoping I am wrong.  It was so odd to see that certain items were completely out of stock, especially on a Saturday when most people do their shopping.  Also, it is still the first of the month for many people getting their govt retirement and SS checks.

Thank you again, I appreciate
D
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148588 tn?1465778809
Chances of averting government shutdown appear slim


The chances of averting a partial shutdown of the federal government seemed to vanish Sunday as leading members of Congress blamed their opponents for being unwilling to come to an agreement on a spending bill keep government operations running.

The House voted late Saturday night to delay President Barack Obama's health care overhaul for a year – a move which made it almost inevitable that a partial shutdown -- which would idle tens of thousands of federal workers -- will start Monday at midnight.

Senate Majority Whip **** Durbin said Sunday that the Senate would reject two amendments the House passed late Saturday night – one to delay Obamacare for a year and another to repeal the tax on medical device manufacturers that was included in the Affordable Care Act.

The Senate is scheduled to meet Monday at 2 p.m. and there were no indications  of a change in that plan despite calls Sunday from House Speaker John Boehner and from two Republican senators -- Senate GOP Whip John Cornyn and conservative leader Sen. Ted Cruz, both from Texas -- for Reid to bring the Senate back into session on Sunday.

Boehner issued a statement Sunday saying that the House "worked late into the night Saturday to prevent a government shutdown, and the Senate now must move quickly, today, to do the same....If the Senate stalls until Monday afternoon instead of working today, it would be an act of breathtaking arrogance by the Senate Democratic leadership."

Not only was there was no sign that Reid would call a Sunday session but some senators – including Durbin -- were in their home states hundreds of miles from the nation’s capital.

When the Senate takes up the House measure Monday, it seems likely that Reid will offer a motion to table, or kill, it.

Under Senate rules, such a motion can’t be debated; therefore no filibuster or delaying tactic by Cruz or others is possible.

Starting last Tuesday, Cruz held the Senate floor for 21 hours to dramatize his effort to block Obamacare.

What will the House do after the Senate acts on Monday?

House Republican Whip Rep. Kevin McCarthy of California said on Fox News Sunday that the House will “get back together in enough time” to avert a government shutdown and will “send another provision not to shut the government down, but to fund it, and it will have a few other options in there for the Senate to look at again….there will be additions that I have found in the Senate that Senate Democrats have said they can support.”

Bipartisan accord did seem likely on at least one point: that the Senate will concur to a bill passed by the House Saturday night that would ensure that members of the Armed Forces get paid even if there is a partial government shutdown.

That bill also ensures that civilian Defense Department personnel, Department of Homeland Security personnel, and outside military contractors whose jobs involve support of active-duty military members would also get paid as they normally do.

Sen. Tim Kaine, D-Va., whose state is home to large military bases such as the homeport of the Navy’s Atlantic fleet at Norfolk, said on Fox News Sunday the Senate “in all likelihood” will approve the House bill on military pay. “I don't suspect that will be too controversial.”

Apart from that, bipartisan agreement seemed only a remote possibility, if Sunday’s talk show rhetoric was any indication.

“If Harry Reid forces a government shutdown, that will be a mistake. I hope he backs away from that ledge that he’s pushing us towards,” Cruz said on NBC’s Meet the Press.

“Why won't the president negotiate and come to a compromise about trying to make Obamacare less bad?" asked Sen. Rand Paul, R-Ky., on CBS’s Face the Nation.

The Kentucky conservative said that Obama was “the one saying, ‘I will shut down government if you don't give me everything I want on ‘Obamacare.’ That, to me, is the president being intransigent and being unwilling to compromise.”

But Durbin said on CBS’s Face the Nation said federal workers “will be the victims of this Republican shutdown strategy – but even more important it hurts our economy. For goodness' sakes, we’re just starting the recovery.”

Asked about potential compromise or negotiations, Durbin lamented, “Look who we have to work with on the other side,” implying that most congressional Republicans could not be reasoned with.

On the possibility of repealing the medical device tax, which is expected to collect $20 billion between now and 2019, Durbin said, “We can even talk about the future of that tax. Let's do it in a responsible way with replacement revenue." He said he was willing to look at replacing the tax, “but not with a gun to my head, not with the prospect of shutting down the government.”

But Cruz contended that the House move Friday night to delay – rather than defund -- Obamacare shows that Republicans are in fact willing to compromise. “That’s the essence of a compromise,” he told NBC’s David Gregory.

The Texas Republican noted that the Obama administration announced in July it was delaying for a year the requirement under the health care law that employers pay penalties if they don’t offer health insurance to their workers or if they offer a plan which doesn’t meet the law’s standards. Why not also delay the law’s requirement for individual Americans, Cruz asked."
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Avatar universal
It is to the point of ridiculousness now.  They have nothing to offer in return other than threats....  I swear, if we are still screwing around with this in a couple of years and a republican gets elected to the highest office in the land, and they try to put a new paint job on this exact plan..... I doubt I will ever vote for a republican again.

I'm over the pettiness.
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148588 tn?1465778809
http://firstread.nbcnews.com/_news/2013/09/28/20732222-shutdown-odds-spike-as-gop-unveils-new-funding-bill?lite

"The odds of a government shutdown spiked on Saturday after the House GOP said it would again vote to force concessions on "Obamacare" as a condition of funding government.

House Republicans doubled down on their strategy of seeking to undo Obamacare as part of the battle over funding the government past Monday, scheduling a vote on a stopgap measure that would delay the health care law for a year.

Though President Barack Obama and Senate Democrats have already said they would reject any measure to fund government that touches on the Affordable Care Act, Republicans barreled ahead with a new proposal to fund the government through mid-December, but also delay Obamacare for a year and repeal a politically-unpopular tax on medical devices contained within the law.

"The American people don’t want a government shut down and they don’t want Obamacare," Boehner and his deputies said in a joint statement. "That’s why later today, the House will vote on two amendments to the Senate-passed continuing resolution that will keep the government open and stop as much of the president’s health care law as possible."

The Republican leaders added: "We will do our job and send this bill over, and then it’s up to the Senate to pass it and stop a government shutdown.”

As a way to politically inoculate themselves against the political fallout from a shutdown, Republicans will also pass separate legislation to guarantee military members' pay should a shutdown come to pass.

Still, the gambit significantly increases the odds of a government shutdown at the end of Monday. As the hours dwindle before the government runs out of money, there's little time left for wrangling. The House proposal will be a non-starter in the Senate, which is controlled by Democrats. To boot, the White House said flatly that Obama would veto the House bill if it were to ever reach his desk.

"Today’s vote by House Republicans is pointless," Senate Majority Leader Harry Reid, D-Nev., said in a statement. "To be absolutely clear, the Senate will reject both the one-year delay of the Affordable Care Act and the repeal of the medical device tax."

"Republicans in Congress had the opportunity to pass a routine, simple continuing resolution that keeps the government running for a few more weeks.  But instead, Republicans decided they would rather make an ideological point by demanding the sabotage of the health care law," White House press secretary Jay Carney said in a statement. "Any member of the Republican Party who votes for this bill is voting for a shutdown."

But even if the upper chamber wishes to send back another clean extension of government spending, that would take some time. And Reid offered no clue as to whether or when the Senate would return; no votes in the chamber are scheduled until Monday afternoon.

Saturday's actions by the House represent a lightning-quick turnaround — in legislative terms, at least — after the Senate approved a continuation of government spending at existing levels through Nov. 15.

That followed an extended debate in which the Senate ultimately rejected a complete defunding of Obamacare as part of a quixotic effort led by Sen. Ted Cruz, R-Texas, who waged a 21-hour talk-a-thon against the health care law. As the debate pivots back to the House, Cruz has urged Republican colleagues to hold the line against Obamacare, increasing the pressure on Boehner to avoid acceding to the Senate-passed bill.

That House Republicans have decided to proceed with yet another effort to undo Obamacare — even despite the steepest odds of succeeding — reflects the extent to which opposing the law has become the central litmus test within the GOP.

The strategy sought by Boehner appeared to have won a significant degree of Republican enthusiasm, though.

“I said, like 9/11, ‘Let’s roll!’” Rep. John Culberson, R-Texas, told msnbc.com, referencing the rallying cry for passengers on Flight 93 who fought to retake the plane on Sept. 11, 2001.

If the House succeeds in approving its new proposal on Saturday, it ups the ante on brinksmanship with the Senate, and Obama.

On Friday, Obama said at the White House that Republicans "are so concerned with appeasing the Tea Party that they’ve threatened a government shutdown or worse unless I gut or repeal the Affordable Care Act."

The president added: "Let me repeat it:  That's not going to happen … Those marketplaces will be open for business on Tuesday no matter what — even if there’s a government shutdown."
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148588 tn?1465778809
This is just the warm up round for the debt ceiling battle. In two weeks we could be !@#$%ing with the world's economy, not just our own.
And best case scenario with the budget would be a CR that would run out in 6-10 weeks when we would have to go through this again.

Senate passes continuing resolution

http://www.salon.com/2013/09/27/senate_passes_continuing_resolution/


"... House bill would keep agencies working Tuesday, when the government’s new fiscal year begins, through Dec. 15. The Senate bill shortened that date to Nov. 15..."

"Senate Chaplain Barry Black opened Friday’s session with a prayer that included, “Lord, deliver us from governing by crisis.”
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