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Government Shutdown

Tag Archives | Government Shutdown

Government Shutdown backlash boosts Terry McAuliffe

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Ken Cuccinelli and Terry McAuliffe

Democrat Terry McAuliffe has opened up a significant lead over Republican Ken Cuccinelli in the Virginia governor’s race amid broad public disapproval of the federal government shutdown, according to a POLITICO poll of the 2013 gubernatorial election.  McAuliffe, the former national Democratic Party chairman, is now 9 points ahead of Cuccinelli, the current state attorney general, in a race that also includes Libertarian nominee Robert Sarvis. In the survey, McAuliffe drew support from 44 percent of Virginians versus 35 percent for Cuccinelli and 12 percent for Sarvis. Four weeks from Election Day, McAuliffe also leads Cuccinelli in a one-on-one contest, 52 percent to 42 percent.

Read the rest at Politico.

China Warns the U.S. over Default

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Zhu Guangyao

Senior Chinese official has warned that the “clock is ticking” to avoid a US default that could hurt China’s interests and the global economy.  China, the US’s largest creditor, is “naturally concerned about developments in the US fiscal cliff”, vice finance minister Zhu Guangyao said.  Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.

He asked that “the US earnestly take steps to resolve” the issue.  US Treasury Secretary Jacob Lew has said that unless Congress agrees an increase in the debt ceiling by 17 October, Washington will be left with about $30bn (£18.6bn) in cash to meet its obligations - about half the $60bn-a-day needed.  For many governments and investors the approaching deadlock over the debt ceiling is far more critical than the current impasse over the federal shutdown caused by Congress’s failure to agree a new budget.  On Sunday Republican House Speaker John Boehner reiterated that Republican lawmakers would not agree to raise the debt ceiling unless it included measures to rein in public spending.

Mr. Zhu said that China and the US are “inseparable”. Beijing is a huge investor in US Treasury bonds. “The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds,” he said. “It is important for the US economy as well as the global economy.”

“We hope the United States fully understands the lessons of history,” Mr. Zhu said, referring to a similar deadlock in 2011 that led to a downgrade of the US “AAA” credit rating.  That deadlock ended with an eleventh-hour agreement.

On Monday, President Barack Obama said he would not negotiate with Republicans in the House of Representatives “under the threat of economic catastrophe”.  He said that he and the Democrats in Congress had already agreed to fund the US government at levels that were favourable to Republicans but lower than preferred by the Democrats.  There is little doubt that Mr. Boehner could whenever he wants gather enough votes from moderate Republicans and most all Democrats to reopen the government, says Dick Meyer, BBC executive producer, America.

Mr. Obama called on Mr. Boehner to allow his caucus to “vote their conscience” on a bill that would fund the government. “If Republicans and Speaker Boehner are saying there are not enough votes, then they should prove it,” he said, adding he had a “strong suspicion” there would be enough Republicans to join Democrats in the House of Representatives to pass the bill. “Let the bill go to the floor and let’s see what happens. Just vote.”

Washington Dysfunction: Everybody Will Leave the Budget Debate Blemished

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President Barack Obama meets with the House and Senate Leadership in the Cabinet Room of the White House to discuss the budget.  Pete Souza/White House

This budget stuff has me worried; uncertainty surrounding the debt ceiling has me even more worried.  President Obama deserves plenty of the blame.

President Barack Obama meets with the House and Senate Leadership in the Cabinet Room of the White House to discuss the budget. Pete Souza/White House

He came into office speaking about a post-partisan era, yet partisan gridlock and petty bickering in Washington are more commonplace than ever.  Obama’s presidency has been a major disappointment. Nothing can change that. He has never woken up to the fact that being president requires reaching across party lines and actually negotiating with people. He’s too busy thinking that he always knows what’s best and that he can charm his way through things. (Well, on both domestic and foreign policy, it appears that isn’t the case).

There is perhaps no other president in history with a greater aversion to talking with members of Congress.  Obama is the loner-in-chief, content to remain aloof while current events and debates pass him by for as long as possible.  Is he really saying that he won’t negotiate regarding the debt ceiling? What could be less presidential than refusing to even have a conversation?

Obama has thrown out red lines before and looked silly for not following through. Given the way he’s handled Syria, this time he might actually follow through on his commitment to not negotiate with Congress – just to demonstrate that he’s still “in charge.”

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Government Shutdown: Barack Obama Warns of Default Danger

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President Barack Obama has been quick to blame the Republican Party for the government shutdown. Jim Lo Scalzo/EPA

President Barack Obama has been quick to blame the Republican Party for the government shutdown. Jim Lo Scalzo/EPA

US President Barack Obama has warned that Wall Street should be concerned that a conservative faction of Republicans is willing to allow the country to default on its debt.  The US government has partially closed after Congress failed to agree a budget and will run out of cash on 17 October unless its debt ceiling is raised.  In a TV interview on Wednesday, Mr. Obama said he was “exasperated”. He later held talks with Congressional leaders that ended without agreement.

The US government closed non-essential operations on Tuesday after Congress failed to strike a deal on a new budget.  Republicans and Democrats are blaming each other for the impasse.  The shutdown has left more than 700,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more.

However, as one budget crisis raged in Washington DC, another one - potentially more dangerous - loomed in the coming weeks.  On 17 October, the US government will run out of cash to pay its bills unless the debt ceiling is raised.

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Boehner Risks his Reputation in Obamacare Shutdown

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Speaker of the House John Boehner walks into a meeting with House Republicans, on Capitol Hill in Washington DC, 28 September 2013.  Michael Reynolds/EPA

Speaker of the House John Boehner walks into a meeting with House Republicans, on Capitol Hill in Washington DC, 28 September 2013. Michael Reynolds/EPA

Republican Speaker John Boehner faced a choice between two unappetising gambles on Monday night. One option was to cut a deal with Democrats to continue federal government spending at present levels, and in so doing trigger a revolt from the radical wing of his own party that might end his speakership. The other was to dig in, precipitate a partial shut-down of the government, and risk the public assigning the blame to congressional Republicans.

Caught between grim and grimmer as far as political prospects were concerned, he has gone for option two, and the government shutdown has begun.

While the sudden reality of the derailing of the US government may come as a surprise to some, for regular viewers this represents the feared collision at the end of a long series of games of chicken between the president Barack Obama (and the Democrat-controlled senate) on one side and the Republican House on the other. Since the Republican victory in the 2010 congressional elections, which gave them control of the House, power and influence has steadily accrued in the hands of the radical wing of the party, elected from safe Republican constituencies on the back of a wave of anti-tax, anti-government fundamentalism among the base of primary voters.

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U.S. Government Shutdown Begins amid Budget Row

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U.S. Capitol

U.S. Capitol

The US government has begun a partial shutdown after the two houses of Congress failed to agree a budget. The Republican-led House of Representatives insisted on delaying Mr Obama’s healthcare reform - dubbed Obamacare - as a condition for passing a bill.

More than 800,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over. It is the first partial shutdown in 17 years.

The economic impact will depend on how long the deadlock lasts, but Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.  With less than one hour to go before midnight, the Republican-led House called for a conference - a bipartisan committee with the Senate - to try to thrash out a deal, but Democrats said it was too late to avoid a shutdown.

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Markets Uneasy over Government Shutdown and Crisis in Italy

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Speaker of the House John Boehner during a press conference.  Photo: Bryant Avondoglio

Speaker of the House John Boehner during a press conference. Photo: Bryant Avondoglio

Financial markets have been hit by the prospect of a US government shutdown and a crisis for Italy’s government. Italy’s stock market has fallen almost 2%, while shares in London, Frankfurt and Paris have dropped by about 1%.

The US needs to agree a new spending bill before the financial year ends at midnight on Monday. But political divisions have resulted in a stalemate. In Italy, Prime Minister Enrico Letta is to hold a confidence vote on Wednesday.

There are worries over the economic impact of a shutdown of the US government. If the government does shut down on 1 October, as many as a third of its 2.1 million employees are expected to stop work - with no guarantee of back pay once the deadlock is resolved.  National parks and Washington’s Smithsonian museums would close, pension and veterans’ benefit cheques would be delayed, and visa and passport applications would be stymied. Programmes deemed essential, such as air traffic control and food inspections, would continue.

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