Tuesday, September 17, 2013

IT'S NOT A SHUTDOWN (The Government Shutdown)

There are vanishingly few days left until the Sept 30th deadline and, if agreement is not reached, a GOVERNMENT SHUTDOWN (everybody panic). If we dodge this bullet* there's still the debt ceiling battle coming up where we could play bumper-cars with America's credit rating ... again.

What's The Deal?
The deal is that the doomsday clock now stands at about "50% to Midnight." This is an obscure way of saying that formerly placid observers, such as The Omnivore, are now getting nervous that 'They might actually do it.' That is: the House might refuse to pass a Continuing Resolution to fund the government in their wish to tank Obamacare. Shutting down the government would suck. If we hit the Debt Ceiling, though, that's traumatic. Between the two, I'd rather choose option (A).

How bad is it? As bad as ever:
“The breakdown is more extensive than you’ve heard,” this person told me. “There is no discussion going on at all at this point.” I asked the source how this breakdown compares to the state of discussion prior to the other confrontations. 
“Nobody knows how this will end,” the person said. “I’m not sure I remember a time when sides were as far apart as this.”
The pundits are characterizing it as a Republican 'civil war:'
The Republican civil war has put Boehner in a tough spot with no clear exit. The House GOP is “still figuring out what’s acceptable to its own caucus,” says Stan Collender, a former House budget aide. “Can they convince their caucus to delay the fight until they have a strategy? My guess is that it’s 50-50.” So a shutdown is still a possibility. 
Fingers are being pointed with an interesting thesis that perhaps Boehner could have held the line against the Tea Party earlier:
Both centrist and conservative members in the House believe that Speaker John Boehner (R-Ohio) and his lieutenants could have done more earlier this year to counter the Tea Party's effort to defund ObamaCare
Such as, presumably, telling them it was impossible ... which he did. Which more or less everyone did.

Edited to add: As of today it appears that the battle in the House between the Defund ObamaCare (and shutdown the government if the Senate and Obama don't go along) and the somewhat milder Delay ObamaCare (where the main provisions are delayed for a year) has been settled. The Defund bill will go for a House vote.

This "can't pass the Senate"--but it does give Ted Cruz a chance to maybe work a little magic. Presumably this is being done fast enough that there's a window for a Plan-B?

A Few Key Points
 First things first: The law is unpopular.
But it's not that unpopular. Secondly, the real problem is that most people just don't know anything about it--although they generally like The Affordable Care Act more than Obamacare (so at least they have that right).

Secondly, we are certainly heading for a budget melt-down: the CBO predicts failure (mostly due to health care costs) in twenty five years. It's never too early for prevention--true--but it might be maybe a decade early for system shock.

Fortunately for budget hawks, no one knows that the deficit is actually shrinking right now and they assume that we've already hit Greek levels of debt/spending-to-income. If people were paying attention it might be harder to keep sequestration during the coming battle.

Finally, there's simply so much data and spin that it's almost impossible to find out who you ought to take seriously.  Here's a letter from Trader Joe's that I wanted to quote from here. They dropped their under-40-hrs a week Insurance coverage due to Obamacare. Did part-time employees get screwed over? Not necessarily:
A Crew Member called in the other day and was quite unhappy that she was being dropped from our coverage unless she worked more hours. She is a single mom with one child who makes $18 per hour and works about 25 hours per week. We ran the numbers for her. She currently pays $166.50 per month for her coverage with Trader Joe's. Because of the tax credits under the ACA she can go to an exchange and purchase insurance that is almost identical to our plan for $69.59 per month. Accordingly, by going to the exchange she will save $1,175 each year ... and that is before counting the $500 we will give her in January.
In other words, it's complicated.

Here is an objective look at the past history of government shutdowns:
In the 1995 shutdown, about 800,000 people were furloughed. The 1996 shutdown was partial, with 284,000 people furloughed, with others working on an unpaid basis.
Furlough-exempt programs include national security and homeland security; government-supplied medical services; food, drug, and environmental inspections; air traffic control; power grid activities; criminal investigations; and disaster assistance.
The Base's Understanding Of The Situation
This is an article I want to call specific attention to: Red State's Ten Myths Used Against Defunding ObamaCare on the October 1 Appropriations Bill. I'm calling this out (from August 28th) because I think it represents either the lack of critical thinking on the part of pro-shutdown Republicans or spin so deep you can't tell the difference. While I generally like Red State, this is particularly bad logic:

Myth 1: That Conservatives Are "Threatening To Shut Down The Government"
The theory is that if Obama / Harry Reid refuse to cave it's their fault. This is, simply, stupid. The results of their refusing to fund a passed law are, plainly, a 'shutdown' of the government. This is a rare--but not unprecedented--event that would happen because of a coercive action on the part of the Republicans. It might or might not be the 'right thing to do'--but it's certainly the threat that is supposed to motivate Obama to give up on the law.

Note: it will not un-pass the law--it will simply un-fund it. I'' note that conservatives have never traditionally been real happy with unenforced or unfunded laws.

Myth 3: That Obama is "Salivating" Over Republicans Taking The Blame
This one is true: Obama is probably not literally salivating--but, hey, they used scare quotes. Their proof that Obama thinks he'd come out ahead? Other than recent CNN polling and actual, uhm, history? That they are frantically fighting the shut-down option!

Egads. Is it perhaps possible they think a shutdown would be bad for the economy and the country as a whole?

Myth 4: That Obama Will Never Sign It
The idea that Obama would take his legacy--one that he presumably believes in--and torch it because of the shutdown is laughable--and he wouldn't have to: Reid would do it for him (this is the crux of another "myth"--that the Senate can't block it ... which they can). The thinking here? That come October 1 when the exchanges go on line people will be so upset with their decline in health care that there will be an outcry strong enough to cave Obama in.

If that is the case, why not simply let that happen and have Obama back it out then? The unspoken reason, of course, is that the opposite could be true: people might like the results. If that happens, Republicans are sunk--but either way, this is crazy logic.

The other six 'myths' are more boring--but aren't any better. What this illustrates, to me, is the strategry that's underlying the shutdown proposal: it's a network of wishful thinking combined with critical misunderstandings and blind-spots. Yes: if the Democrats take full-blame and Obamacare is instantly so bad there are, like, riots, the President will cave.

But is that what you gamble your whole credibility on? It is if you're one guy ...

What Do I Think?
I think I misunderestimated just how much Ted Cruz wants to be / thinks he can be President in 2016. His calculus looks like this: he figures if he's the guy who beat Obamacare he's a lock. That's gutsy thinking--and probably not true beyond the base--but it's not insane either. This gives him one outside 3-pt shot to be, at least, the Republican nominee. If his movement fizzles then he's part of a slew of also-rans.

So he's balls-to-the-wall and that gives the base someone to rally behind--which means he has no reason not to take it all the way.

I also think that for guys like Cantor and Boehner who will face primary challenges over this, the only 'winning move' may be a few days of government shutdown. It'll convince everyone they're serious--there's a chance Obama will take a bunch of damage too--and hey, who knows, maybe he'll cave?

The 40+ repeal votes have built up such a tolerance to symbolic gestures that now the base wants blood--so, who knows? Maybe they'll get blood.

* I suspect they'll pass a stop-gap to give themselves more time ... something anticlimactic like that.

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