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Federal Government Shuts Down for First Time in 17 Years

posted on October 4, 2013


After weeks of Congressional name-calling, finger- pointing and relentless bickering, lawmakers failed to agree on a continuing resolution funding the federal government by the September 30 deadline.

House Republicans have approved spending bills that maintain current spending levels but do NOT provide funding to implement the Obama Administration’s signature legislative achievement: The Affordable Care Act.

The measure was designed to help nearly 30 million uninsured Americans get coverage. It also prohibits insurance companies from denying coverage due to pre-existing conditions and imposes other reforms.

House Republicans – especially fiscally conservative members of the Tea Party – adamantly oppose what they refer to as Obamacare and have worked to repeal, defund or weaken the legislation ever since it was signed into law in March of 2010.

Senate Democrats, on the other hand, insist that the Affordable Care Act be fully funded and they refuse to negotiate concessions in reforms signed into law three years ago.

Ultimately both parties dug in their heels, and on Tuesday – for the first time in 17 years – the federal government shut down.

Federal Government Shuts Down for First Time in 17 Years

Congressional leaders of both sides of the aisle blamed each other for the impasse that has shuttered numerous government agencies, curtailed delivery of some popular government services, and furloughed hundreds of thousands of government workers.   

Senator Harry Reid, Majority Leader:  "Speaker Boehner and his band of Tea Party radicals have done the unthinkable. They've shut down the federal government. Now for us, that's hard to comprehend as being good. For them, they like it."

Rep. John Boehner, Speaker of the House: “My goodness, they wont even sit down and have a discussion about this."

While fiscal restraint -- or the lack thereof -- typically, has been the issue in most – if not all – of the 17 previous shutdowns, Democrats say the Republicans are working a political agenda. 

President Obama:  "They've shut down the government over an ideological crusade to deny affordable health care to millions of Americans.  In other words, they demanded ransom just for doing their job."

In the hours leading up to the shutdown and immediately after it went into effect, House Republicans approved several spending resolutions that would have kept some parts of the government open.  But Senate Democrats rejected all of the proposals because they included provisions they say would either delay implementation of weaken key provisions of the Affordable Care Act.

Some economists believe the shutdown will have a minimal effect on the economy. But for the 800,000 federal employees who were furloughed Tuesday, the lack of a paycheck is making an immediate impact.

Paul Sacker, Environmental Protection Agency:  "I'm going to start digging into my savings as the paychecks stop coming I'm going to have to dig into my savings to pay my mortgage, my bills, my daughter is in college, we have expenses to cover for her."

On Wall Street, the initial fallout was minimal.  In fact, the Dow actually posted a modest rally Tuesday on the first day of the shutdown.  But later in the week, the lack of a speedy resolution to the debacle had taken its toll, and the Dow and the S&P 500 both posted their 9th decline Thursday in the past 11 sessions. 

Jan Goodwin, Environmental Protection Agency:  "I have to go in and shut myself down and go home again.  I don’t know how long I’ll be not working."

The Labor Department’s monthly employment report – a key barometer of economic vitality that often proves to be a market-mover -- became a casualty of the shutdown Friday.  And like most of the employees at the I.R.S., the EPA, and the Departments of Education, Treasury and Interior, Labor Department employees were deemed “non-essential” and found themselves joining the ranks of the unemployed. 

David Poppert, Department of Labor:  "Part of it is I'm not going to be going to McDonalds and spending a dollar. I'm not going to be going to Home Depot and spending money on home renovation projects. So for every dollar I don't spend at a business that business is not making money to pay its employees."

Despite the shutdown, more than 60 percent of federal employees are still on the job. And while Uncle Sam sent about 40 percent of the federal workforce home without pay, members of Congress and President Obama all will receive paychecks during the shutdown.


Tags: Environmental Protection Agency Paul Sacker President Barack Obama Rep. John Boehner U.S. commerce U.S. Department of Labor