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Government Shutdown 2013

Government Shutdown 2013. Need to begin story with the Affordable Care Act (ACA) or Obamacare Signed into law - March 23, 2010 Upheld by the Supreme Court – June 28, 2012 “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

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Government Shutdown 2013

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  1. Government Shutdown 2013 • Need to begin story with the Affordable Care Act (ACA) or Obamacare • Signed into law - March 23, 2010 • Upheld by the Supreme Court – June 28, 2012 • “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” • John Roberts • History • Key component of Democratic Party primary in 2008 between Obama & Hilary Clinton • one of Obama’s top 4 priorities after election

  2. Government Shutdown 2013 • 2008 House – Dem – 257, Rep – 178 • Senate – Dem – 58, Rep – 40, Ind – 2 • November 9, 2009 – ACA passed by House 220-215 – sent to Senate • filibuster threat, passed in Sen., 60-39 • death of Ted Kennedy (D - MA), Scott Brown (R – MA) • Rahm Emanuel (Chief of Staff) scales back ACA to get more Republican support in Conference Comte • insert Individual Mandate  originally a conservative idea – think Massachusetts Health Law – signed by Mitt Romney • Senate version passed on March 21, 2010 by House 219-212, Obama signs 2 days later

  3. Government Shutdown 2013 • Key Provisions: • Prohibits insurers from denying coverage for pre-existing conditions • Individual mandate  everyone must have health insurance  or pay penalty • Creation of “exchanges” - marketplace where individuals and small businesses can compare policies and buy insurance • Federal subsidies for poor (expansion of Medicaid) Employers of 50 or more required to provide health insurance or face penalty ($2000/employee) • Streamlining Medicare  efficiency

  4. Government Shutdown 2013 2010 Elections House – Rep wins 63 seats  Rep – 242, Dem- 192 Senate – Rep wins 6 seats  Dem – 51, Rep – 47 2012 Elections House – Rep – 234, Dem 201  popular vote Rep - 58,541,130 Dem - 60,252,696 Senate – Rep – 45, Dem -53  popular vote Rep - 39,130,984  Dem - 49,998,693 Presidential – Romney 206 Elec. Votes pop vote - 60,933,500 Obama 332 Elec Votes pop vote - 65,915,796 What does this mean??

  5. Government Shutdown 2013 • Congressional Budget Office – CBO • - est. # of insured in US by 2019  93% • 26 million Americans will remain uninsured • insurance exchange  websites with private plans available for purchase  first open enrollment – October 1, 2013 • free market?? • effect on deficit  2011 comprehensive CBO report shows $210 billion REDUCTION in deficit with $604 billion in expenses & $813 billion in revenues

  6. Government Shutdown 2013 • What’s this got to do with a budget deal? • Separation of powers  • Congress must approve an agreed budget, which the President must sign – every year! • If the President and one or both of the chambers of Congress cannot agree over budget – shutdown! • federal government need funding to operate • Recent years  stopped every year • Continuing Resolution – stopgap to keep gov’t operating • Congressional Republicans  no CR unless ACA is repealed • tied ACA with budget passage!!

  7. Government Shutdown 2013 Key Players – President Obama House Speaker John Boehner House Minority Leader Nancy Pelosi Senate Majority Leader Harry Reid Senate Minority Leader Mitch McConnell Senator Ted Cruz (R – TX)

  8. Government Shutdown 2013 • Cost of shutdown • IHS, a global market research firm • $300 million/day in lost economic output • $2 billion over 3 weeks – 1.4% lost in GDP • 800,000 to 1.2 million federal workers furloughed • What services stop? • National Institutes of Health  • Center for Disease Control • Department of Housing and Urban Development • e-Verify program - immigration

  9. Government Shutdown 2013 • Law enforcement continues, but Justice Dept stops civil cases • National Park Service – incl nat’l monuments • EPA • OSHA • Labor • FTC, not SEC Oh yeah, private contractors, too!! • No visas, passports • VA hospitals remain open, but services disrupted • Dept of Agriculture  stop Women, Infants, and Children (WIC) program • the list goes on and on!!

  10. Government Shutdown 2013 • How does it end? • Congress passes bill to fund the government & Pres. signs it!! • When?? • What’s next? • Oh no! – Debt Ceiling fight!!!! • October 18 or soon after • Will Congressional Republicans hold debt ceiling as political pawn against ACA? - Debt ceiling not raised, US will default on bonds and/or Social Security payments  has NEVER HAPPENED!!

  11. Government Shutdown 2013 • Disruptions of financial markets • cost of borrowing for US goes up • cost of borrowing for everyone goes up • disruption of economy • WORLDWIDE!! • afterall, the US has the world’s largest economy!

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