For the last month or so the media has been picking up on the idea that a government shutdown was in the future. Here we are, and they were right. One of my most recent newsletters discussed the possibility of a government shutdown and a sequester. The last time the government had a ‘shutdown’ was in 1995, but the argument now is much different then it was almost 20 years ago.
This arguement in Congress is focused around Obamacare. Many think the arguement is about funding and if it isn’t funded then the law dies – not exactly. Government spending is divided into two categories, discretionary and non-discretionary. If budget legislation cannot be agreed upon between the chambers of Congress, then all discretionary spending would halt. Much of the health care law is categorized under non-discretionary funding thus it continues regardless of a budget. The argument (from what I can tell) seems to be focused around certain discretionary aspects of the law as well as the medical device excise tax and whether or not the Republicans in the House can slow the full implementation with the budget argument. Earlier today the Senate voted along party lines (54-46) to reject the funding bill approved by the House on Sunday.
I know there are many questions out there about Obamacare and what happens in the case of a government shutdown. That question was asked to the Congressional Research Service this past summer in preparation for a possible shutdown. Here is a very interesting and informative letter to a U.S. Senator from Oklahoma on the “Potential effects of a government shutdown on the implementation of the Patient Protection and Affordable Care Act”.
Overall the spending in Washington is the tip of the iceberg. We have the government shutdown discussion, soon it will be the debt ceiling, and soon after that will be sequester cuts. So, as predicted by many – the political uncertainty has just begun.