The US Senate and the House of Representatives did not pass the budget, so at midnight between Monday and Tuesday, October 1, funding for the US federal government was blocked, as a result of which more than 825.000 employees were immediately sent on forced vacations.
Members of the US Army and Coast Guard will receive pay thanks to a special law signed by President Obama, although every second of the 800.000 civilians working at the Pentagon has also gone on furlough, and the CIA has sent some "civilians" on furlough.
NASA continues to support astronauts on the International Space Station and work to maintain the spacecraft that have been launched so far, the Hubble telescope and the Mars rovers continue to operate, but the analysis of the data they send stops. Work on aircraft that have not yet been launched is suspended.
Air traffic control is also working, but suspending training and support personnel.
The post office is self-financed, so it continued to work normally.
The Department of Human Rights and Education has suspended investigations into whether some universities are meeting obligations related to combating sexual harassment on campuses.
National parks, Smithsonian museums, the Holocaust museum, the Air and Space Museum and others are closed.
The Federal Reserve System has its own funding systems and operates smoothly, as do the Departments of Veterans Affairs and the Social and Health Care Systems, which are partially self-funded, or funded by long-term budgets…
About 45 percent of the food service administration is on furlough, and the Food and Drug Administration (FDA) is suspending routine food inspections and most laboratory research, although meat, poultry and grain inspectors have continued to work.
It did not, however, continue the program for providing food for poor pregnant women, mothers and children, although some states continue to finance it from available funds.
The Department of Tobacco and Alcohol Taxation and the Bureau of Commerce will not approve trademarks for alcohol products, nor grant licenses to distilleries, wineries, and breweries... The national organic food labeling program has been suspended.
The most recent shutdown of government activities (shutdown) went into effect after a group of about forty House Republicans continued to pressure Speaker John Boehner not to allow a vote on any budget resolution unless the Care Act was blocked or delayed (Affordable care), which is part of "obamaker" (Obamacare) of the package under which 35 million Americans receive Social Security.
The House of Representatives voted on a new budget proposal with a regulation on delaying Obamacare funding for the next year. 228 congressmen voted for such a proposal, while 201 were against it. Among those who voted "for" were nine Democrats, while twelve Republicans voted against this proposal. Otherwise, the current 533 members of Congress will receive paychecks thanks to the 27th Amendment to the US Constitution, which since 1992 prohibits members of Congress from changing their own salary during their term.
The Senate rejected the bill by the Republican majority in the House of Representatives by a vote of 54 to 46, after Republican Senators Ted Cruz and Mike Lee tried to block the Senate with a filibuster - Cruz spoke continuously on the Senate floor for 21 hours.
Republican leaders offered negotiations to the Democrats, but soon after, Senate Democratic leader Harry Reid rejected the proposal, explaining that he would not negotiate with a gun to his temple, a point that Obama would later repeat, who called on the Republican leader to vote on the budget without conditionality, so that people can go back to work.
Despite the blockade, the Obama administration began implementing a key element of health care reform, so on Tuesday, October 1, Americans could buy health insurance policies in special markets, which are subsidized for people with lower incomes - six out of ten uninsured Americans can qualify for policies. that cover health insurance for less than $100 per person per month.
The government shutdown will not directly affect health insurance policy markets, because the subsidy money does not depend on this year's budget. Companies with over fifty employees are obliged to insure their workers.
SEVEN DECADES OF OPPOSITION: Health care reform, which Republicans tried to undermine when passing the budget, was passed through the Affordable Care Act, which the president signed back in 2010.
Obama's reform of the health care system is called by some a domestic political achievement and the biggest intervention in the social fabric of America in the last fifty years. It complements the program from 1965 (Medicare, health insurance for seniors and Medicaid, health insurance for poorer citizens). Nearly two-thirds of currently uninsured Americans work full-time, according to the foundation's research Kaiser Family Foundation, and another 16 percent of them work part-time.
Obama's health insurance law remained in force after forty attempts by Republicans to overturn the legislation in whole or in detail (for example, whether Social Security should be given to smokers). The Constitutional Court rejected the republican initiative to cancel that law.
MOTHER'S MILK OF POLITICS: Conservative groups, supported by corporate money, have been opposing the idea of universal social security, which dates back to the 1930s in the US, for seven decades. In the 1970s, proponents called the idea the last piece of welfare state legislation established in the US by Roosevelt's New Deal.
President Harry Truman encountered resistance from the opponents of the social system in 1945, when he proposed to implement the pre-war social security laws. Democratic President Bill Clinton's proposal was torn apart by opponents in the XNUMXs.
Against the background of decades of fighting over the social package in America, one can see how true the saying is that money is the mother's milk of politics.
The "New York Times" these days writes that many Americans seem to think that the government shutdown came out of nowhere, although the care law has been fought since its adoption by a galaxy of conservative groups with much more money and organized tactics than the American public is aware of: Groups like the Tea Party Patriots , Americans for Property and Labor Freedom, Growth Club, then sister organization of the Heritage Foundation, Young Americans for Freedom, Heritage Action formed in 2010, etc.
The "New York Times" mentions the billionaire brothers Kočk, Charles and David, owners of a powerful corporation, as significant financiers of that campaign. Koch brothers a $98 billion, Wichita, Kansas-based oil, minerals, fertilizer and livestock company.
The Kočk brothers, otherwise philanthropists, fund 43 libertarian non-profit organizations. They gave $60 million to defeat Obama in the election, and David H. Kochk organized a donor dinner in favor of Mitt Romney, the Republican candidate in 2012, for which the "ticket" cost $50.000 per person, and $75.000 for a couple. Through Freedom Partners, an organization made up of those who pay more than $100.000 in taxes, $236 million was given to the Patient Rights Center and various conservative groups, such as the Tea Party Patriots, who opposed the Obamacare agenda in the 2012 election…
Public opinion polls show that Americans are divided about Obamacare, according to one agency survey Gallup-Ipsos 54 percent of Americans are dissatisfied. Although nearly a third (29 percent) of that number think the reform doesn't go far enough, conservative activists figured the public was behind them and worked with Tea Party members in Congress, who excitedly drew a red line against the law they despise.
About 20 percent of congressmen from the ranks of Republicans close to the conservative Tea Party movement repeat that the implementation of that law will create a new class of Americans that is dependent on government subsidies, and that will always vote for Democrats, that doctors will be in the jaws of bureaucrats, and that state intervention is in the health insurance system (in America, otherwise a huge private business) to be "apocalypse", "threat to America" and "introduction of socialism", etc.
Generational Opportunities, an organization funded by the Kočk brothers, circulated an ad online showing Uncle Sam leaning between a woman's legs during a gynecological examination.
ALREADY SEEN: This government shutdown under Obama was preceded by seventeen similar shutdowns under Ford, Carter, Reagan, Bush Sr. and Clinton (1995-1996 the so-called Gringitch Revolution, when the administration-wide shutdown lasted 21 days). There were also blockages of the budgets of the cities and US states of Minnesota, New Jersey, Pennsylvania.
Mutual controls of the three branches of government: legislative, executive and judicial (checks and balances), in which Congress and the Senate can "weaken" a "strong" president, functioned differently. Budget negotiations have been different when the president is not from the party that controls Congress, different when the congressional majority and the president are from the same party, and different when the president's party controls only one house of parliament, as is the case now. Since the 2009s, Congress has failed to approve certain expenditures or spending priorities thirteen times. The last budget passed smoothly in XNUMX.
In the last "political-financial thriller", a similar dispute over the borrowing limit, a "march towards the financial cliff", towards the abyss, gambling with the financial stability of the whole world, ended at the last minute with Hollywood's luck on August 1, 2011. Even then, the crisis was characterized by the ultra-right wing of the Tea Party Republicans.
Some liberal-oriented newspapers, however, conclude that the Republicans are shooting themselves in the foot with this blockade, because 60 percent of Americans disapprove of their actions during the blockade, and 51 percent of Obama's behavior. Obama declares that a large number of people asked for "Obamamaker" policies exactly in the areas where the Republicans won, that is, that a significant part of the beneficiaries of the extended insurance belong to white families who live from small businesses in middle America and vote for Republicans.
BLOCKAGE PRICE: Research firm IHS has estimated that the US government's financial blockade will cost the US at least $300 million a day in lost gross domestic product (GDP). A three-week government blockade, like the one from 1995-1996. year, it would reduce the US GDP between 0,9 and 1,4 percentage points.
Concerns that the government's financial blockade could threaten economic growth have already caused nervousness among investors and a drop in stocks on the New York Stock Exchange.
American newspapers speculate that a way out of the resulting blockade could be technically found, and the solutions look a bit like a joke, and more like an illustration of American shoreless pragmatism, which manifests itself more crudely on a global scale. Time magazine mentions one of the proposals: based on the findings of Jack Balkin, professor of constitutional law at Yale, that the law allows the Treasury to mint platinum money without a limit, two billion dollar platinum "coins" could be minted, that two "coins" are deposited in the federal treasury and that checks are issued based on that coverage.
Another proposal is to issue so-called premium bonds. That speculation would be based on the fact that the price of bonds depends on two factors: if someone has a bond with a face value of $100 with an interest rate of four percent, and in a few weeks the interest rate jumps to six percent, he can sell it for less than $100, and around the interest rate falls to two percent, they will sell it more expensively.
Third way out: One hundred years ago, the US Congress established the practice of limiting the amount up to which the Treasury can borrow, however, University of Baltimore law professor Garrett Epps finds that the 14th Amendment to the US Constitution stipulates that the validity of US public debt authorized by law cannot be questioned, which introduced that Southern congressmen could not blackmail the Union until Confederate debts were paid.
The White House makes it known that it will not use those exits. President Obama refused to negotiate with the Republicans, he emphasized that he had made enough concessions, that he was lowering the level of the budget deficit (it is now around seven percent), and that because of the due obligations, the US borrowing limit must be raised. Obama compared the possible refusal to the behavior of someone who had a good dinner and then refused to pay.
If no deal on increasing the borrowing limit is reached on October 17, Washington will run out of cash and have to start delaying paying bills, and with the existing budget reserves of 30 billion, it could pay new bills only from current revenues - when they arrive. The three major credit rating agencies have warned that the US rating could be downgraded, which happened in 2011.
Reuters speculates that some signals indicate that a compromise could be for Congress to decide to temporarily raise the debt ceiling, to buy time for further bargaining, traditionally the core of America's complex political system.
The scenario to be feared: if the new credit limit (there is 16,7 trillion dollars) is not voted on Capitol Hill by October 17, the US could declare bankruptcy in a week or two, which would first affect the countries that keep their reserves in the American currency, above all China (which he already warned) and Japan, and the consequences for the world economy are difficult to forecast.
IMF Director Christine Lagarde said in a speech to students at George Washington University: "The blockade is bad enough, and if a solution to the US sovereign debt is not found on October 17, it could seriously threaten not only the US economy but the entire global economy…”
"Due to the administration block, we will not use this account. Goodbye Earthlings. Solve it yourself." This is how the NASA team that controls the Voyager 1 spacecraft, the successor to Voyager 2 that recently left our solar system after 1 years of travel, reacted on Twitter on October 36.
NASA sent most of its employees home due to the government shutdown and even shut down its system for tracking near-Earth objects. Because of this, the Americans have been debating for a long time what will happen if there is an asteroid that threatens the planet, and we don't find out about it on Twitter in time.
And not only this, but all NASA programs have stopped working, except for the control center in Houston, which is in charge of managing missions on the International Space Station. The NASA website has been shut down, but news from space somehow still reaches Earthlings - under the label "What NASA Might Tweet", interested citizens publish news from space, and according to NASA PR, they do a really great job.
However, in the world of technology, the blockade does not go so smoothly everywhere, because one of the biggest users of information technology is precisely the American authorities. This year's budget investment in IT is about 78 billion dollars. The army of people spending this money mostly worked to maintain gigantic systems, in so-called data centers, on supercomputers and huge networks. A lot of it is shut down or in hibernation.
The first thing American citizens notice—government websites—has largely been shut down. Most are not working at all, such as NASA.gov, the Federal Trade Commission, the Export-Import Bank, the National Archives, the Patent Office, the National Science Foundation, and the Department of Agriculture, while some are functioning but no longer have up-to-date information - no one on them it doesn't work for days.
Since the Stock Exchange Commission has drastically slowed down the work, the blockade could even affect Twitter's IPO, which is being heralded as the stock market deal of the year.
M. Vidić
In 2012, the US national debt reached a record 16 trillion dollars, i.e. for the first time in the country's history it exceeded the gross domestic product. As 2013 draws to a close, so does the debt figure of $17 trillion.
In 2001, before the start of the "war on terror" (war on terror), the national debt of the USA amounted to 5,8 trillion (thousand billion), or 55 percent of GDP. However, already in 2002, 33,8 billion was spent on war - a figure that grew from year to year and by 2008 had risen to as much as 200 billion dollars per year. Then came the crisis: the economy shrank by 3,7 percent in the third quarter of 2008; the bank rescue law took another 350 billion. From around 10 trillion, the debt grew to almost 2009 trillion dollars in 12 alone. In addition, the GDP also fell by seven percent in the first quarter, and another nine percent in the fourth quarter, and in the same year another 242 billion was spent on Obama's American Recovery and Reinvestment Act - government aid to the economy in trouble. For the same purpose, another 520 billion was spent in the next two years, so that at the end of fiscal year 2012, the national debt amounted to 16,066 billion.
About one-third of the total US debt goes to foreign creditors. According to data from July of this year, China and Japan are at the top of this list (which "debt" the US by 1,28 and 1,13 trillion dollars, respectively). The next group of countries is called "Caribbean Banking Sector" with about 300 billion dollars (there are Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Netherlands Antilles and Panama). Oil exporting countries follow with 256 billion (Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Algeria, Gabon, Libya and Nigeria). Switzerland is the first European country on the list of the largest creditors of the USA with about 180 billion dollars in claims, and the group of countries to which the USA owes more than 100 billion also includes Belgium, Great Britain, Luxembourg, Russia and Ireland.
Finally, which companies does the US government work with the most? The answer here is very simple: only in the fiscal year 2013, the company Lockheed Martin with defense system products, it won $27,9 billion in US government contracts – nearly double the number of runners-up Boeing (15,2 billion). With 10,4 billion dollars, the company is in third place Raytheon, which produces weapons, military and commercial electronic products, and with slightly less than 10 billion is the fourth General Dynamic Corporation, also from the field of defense.
R. Marković
