Understanding Obamacare and the Government Shutdown

Originally reported on SensibleReason.com on October 2, 2013

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In the path of the government shutdown this week many questions have emerged: Why did we shutdown? How long will it last? What does a government shutdown even entail? How will I be affected? The political conflict between the Republican House of Representatives and the Democratic Senate has been thrown into the lives of Americans, who are now left without hundreds of government programs and the responsibility to figure out what it all means. Here at SensibleReason we’ll lay out all of the important details to help you through what seems to be a political mess.  

Why a shutdown?

The government shut down at midnight on October 1, 2013 as a result of Congressional failure to agree on a fiscal spending budget for the upcoming fiscal year. The Constitution mandates Congress to pass yearly spending bills to fund government programs from October 1 to September 30, also known as the fiscal year.  When Congress fails to do so, funding is no longer available and most government programs come to a halt. Some essential programs (and essential employees), such as Social Security, air traffic control, and active military pay, continue to be funded, but 800,000 federal employees are put out of work without pay as the government shuts down national parks, monuments, museums, and federal offices all across the country. The last government shutdown was in 1995 and lasted 21 days, into 1996.

The shutdown comes as a result of recent debates between the Republican-dominated House of Representatives and the Democrat-controlled Senate. Republicans in the House insist that any spending bill reduce funding (if not completely, than at the very least partially) to the Affordable Care Act (aka: ObamaCare), which was also to begin programming on October 1 of this year. Long critics of the program, the Republicans vouched to do anything, including disrupting government funding, to hinder it’s success. Senate Democrats are just as insistent that funding for the program remain as is.

On the morning of Sunday, September 29, House Republicans passed two spending bill amendments that aimed to cut funding to ObamaCare: one proposed postponing the installation of ObamaCare for another year; the other repealed ObamaCare’s medical device tax. The Democrat Senate staunchly rejected both bills, refusing to change anything regarding the program.

In a last effort to avoid the government shutdown the House proposed another bill late Monday night that would delay enforcement of the “individual mandate” clause of the Affordable Care Act. The Senate rejected the bill once again, setting the government up for shutdown. During the final hours of the night, Senate Majority Leader Harry M. Reid warned House Speaker John A. Boehner that without Republican concession to pass a simple bill to keep the government open without continuing assault on the health-care law, “the responsibility for this Republican government shutdown will rest squarely on his shoulders.”

What does the lack of funding mean for the US? It could mean the nation’s first default.Without this funding and Congressional approval for additional borrowing authority, the Treasury Department is predicted to run out of cash to pay the nation’s bills as soon as October 17. If the US defaults, she will lose her status as “the most reliable creditor in the world,” said Shai Akabas, senior policy analyst at the Bipartisan Policy Center. Other countries back their national currency on US Treasury bonds because the US dollar is so stable and reliable. A government shutdown for an indefinite length of time hurts the credibility of the US dollar, therefore jeopardizing other nations’ financial stability and encouraging these countries to discontinue backing their currency with US currency. This would have devastating effects on the US economy and the US would continue to augment its debt with no way to pay it off. Democratic aides have suggested that, because of this looming threat, negotiations to reopen the government might be set in the debt-limit talks.

How will this affect me?

The government shutdown will affect us all in ways big and small.

Non-essential government employees will be forced to stay home from work as most programs will be shut down until the government reconvenes. Therefore, the services provided by these government agencies will also be put on hold. Most notably this includes: the Bureau of Alcohol, Tobacco, Firearms and Explosives — meaning no new gun permits will be processed; the Food and Drug Administration, which conducts most food inspections (meat inspections will continue under the Agriculture Department); the Board of Veterans Appeals — which means all rulings towards disability and pension claims from Veterans will come to a halt; the National Institute of Health — under the government shutdown all grants are stopped, so no new patients for clinical research trials will be accepted; and DMVs, passport agencies, VA offices and many others are to suspend service until further notice from the government.

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National parks will be closed, curtailing vacation plans and evacuating those already there, but some parks (those without gates) will remain open to tourists to walk, run, or bike through the area. Applications for federal loans will be put on hold and the Justice Department will suspend civil cases until government agencies resume operation.

Overall the shutdown means a huge blow to the economy. With the government out of commission, and thus shutting down what Obama calls “America’s largest employer,” the United States is estimated to lose $1.6 billion a week in economic output, according to IHS Global Insight, a market research firm.

However, members of the military will still be expected to serve, Social Security and Medicare benefits will continue, postal service will resume, and ObamaCare will still be put in effect Tuesday.

But the effects of the government shutdown aren’t only seen in the United States.

Claire Brosnihan, stationed with the Peace Corps in a rural village in Rwanda, said that thegovernment shutdown endangers those volunteering outside of the US.

“Hey Congress, you know what’s deeply uncool?,” she wrote on her Facebook status Tuesday. “Getting this letter from Peace Corps in my inbox today because of your incompetence: ‘If the Peace Corps were to suspend its operations overseas during a funding hiatus, the health, safety and security of Volunteers would be at serious and immediate risk.‘”

According to the Peace Corps Website, if the program decided to bring all volunteers home for safety concerns it would cost the United States over $29 million dollars and take 15-30 days to execute the process. As of now there are no plans to do so.

So, the government is shut down… What now?

Congress is at a standstill with neither side willing to give up their position to renegotiate the amendments to the federal spending bill.

In a speech to the nation Monday morning, President Obama blamed stubborn Republicans for the government shutdown and asked the House to reconsider how their actions are affecting the nation.

“Republicans in the House of Representatives refused to fund the government unless we defunded or dismantled the Affordable Care Act,” Obama said. ”They’ve shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans. In other words, they demanded ransom just for doing their job.”

House Speaker John Boehner responded in an op-ed piece in USA Today, claiming that the the shutdown is due to the lack of negotiation and flexibility from Senate Democrats.

“The president isn’t telling the whole story when it comes to the government shutdown,” Boehner wrote. ”The fact is that Washington Democrats have slammed the door on reopening the government by refusing to engage in bipartisan talks. And, as stories across the country highlight the devastating impact of Obamacare on families and small businesses, they continue to reject our calls for fairness for all Americans.”

Debates Tuesday focused on whether or not Congress should pass a temporary bill to provide enough funding for the government to resume some operations for a few weeks or months while Congress can continue to discuss the provisions of the spending plan before full approval. While some have endorsed such a bill, others have rejected the idea, noting that the government cannot simply pick and choose which programs to reopen short-term — a long-term solution is best for all.

Since late Monday evening neither party has communicated with each other directly.

ObamaCare Recap — What’s the fuss?

Obama_signs_health_care-20100323The Affordable Care Act, more generally referred to asObamaCare, is a United States Federal Statue signed into law by President Barack Obama on March 23, 2010. The health-care reform act is designed to improve the quality and affordability of health insurance for all Americans and lowering the uninsured rate by expanding public and private insurance coverage.

Spearheaded by President Obama, ObamaCare was developed after a history of bipartisan support for an individual mandate clause from all factions of the government in 2008 as an approach towards comprehensive, national healthcare reform. After taking office in 2009, Obama worked with Congress to construct a plan for healthcare reform, but after adopting the individual mandate clause in the act, many Republicans began to describe the mandate as unconstitutional.

To get the bill to pass through both the House of Representatives and the Senate called formonths of negotiation and compromise, but on December 24 the bill passed through the Senate with a vote of 60-39. The House of Representatives then passed the Senate bill on March 21, 2010 with a vote of 219-212. The next day Republicans voted to repeal the bill. 

ObamaCare works by setting up regulated, online marketplaces administered by either the federal or state government, known as exchanges, from which individuals and small business can purchase insurance plans on October 1, 2013. Insurance plans sold on the exchanges must be approved by the government and are prohibited from denying insurance to customers based pre-existing conditions. Regulations are also put in place to reduce competition and make insurance more price-friendly while also preventing price discrimination for poorer or ill clients.

The individual mandate clause of the act requires every individual to be covered by health insurance or incur a penalty up to $95 for not doing so. Estimates have found that the individual mandate will reduce the number of uninsured American citizens by 32 million, leaving 23 million without insurance after all provisions take effect.

Those who will be left uninsured will include:

  • Illegal immigrants, who make up an estimated 8 million of the population.
  • Citizens not covered and opting instead to pay the annual penalty.
  • Individuals whose coverage would exceed more than 8 percent of their household income — these individuals are also exempt from the penalty.
  • Citizens under certain hardships, including those who are eligible for Medicaid but whose states chose not to expand their programs.

The employer mandate of the clause requires employers of companies with over 50 employees to provide affordable healthcare packages for full-time employees that work over 30 hours a week. However, some fear that the mandate will encourage employers to reduce workers hours or cut staff completely in order to avoid penalties and evade the requirement to provide health insurance.

Debates on whether requiring American citizens and employers to obtain health insurance was constitutional sent the act to the Supreme Court, who, after much discussion, upheld the constitutionality earlier this year.

However, Republicans still accuse ObamaCare as being detrimental to citizens of the United States, stating that it will increase healthcare costs while hurting the quality of care patients receive. Some accounts insist that ObamaCare is leaning the United States towards socialism and forcing citizens to pay for programs they don’t want or necessarily need. With the installation of ObamaCare on October 1, Republicans worked to remove funding for the program from the fiscal spending bill, and after failed negotiations with Democrats, the government shut down.

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