President Obama met with congressional leaders including Speaker of the House John Boehner (R-Ohio) on Wednesday afternoon to discuss a possible solution to the budget impasse that shut down much of the U.S. government on Tuesday, but it appears that policymakers are no closer to reaching an agreement.
House Republicans, ostensibly whipped into action by a small, hyper-conservative faction within the party, continue to refuse to pass a clean continuing resolution, insisting that Democrats cede changes to (read: defund or delay) the Affordable Care Act.
U.S. equity markets soured Thursday morning as the country began to plod through the third day of a partial shutdown. The market’s mood, along with consumer and businesses confidence in the economy, is expected to decline in proportion with the duration of the shutdown. Gallup’s Economic Confidence Index averaged -19 in September, down from -13 in August, making for the worst reading in a year, and it can be expected to decline further as the shutdown persists.
Congress may have a 14 percent approval rating (as of August — this could also decline in the coming weeks), but not all of America’s policymakers are determined to be a national embarrassment. Exposing the stress fractures that have developed in the Republican Party over the past few years, a growing number of GOP lawmakers — at least 18, at last count, according to Bloomberg — have signaled their support of a clean CR and have urged Boehner to allow a vote on one.
There are 435 seats in the U.S. House of Representatives. Three of them are vacant, 232 are controlled by the Republican Party, and 200 are controlled by the Democratic party. This means that 217 votes are needed to pass a clean CR.
So what’s standing in the way? Boehner would have to authorize the vote, and so far, he seems unwilling to do that.
The total cost of the shutdown is hard to quantify. Estimates range anywhere from $40 million to $300 million per day, depending on what is included in the calculation. Approximately 800,000 workers have been furloughed, and the the scope of the impact is systemic: lost labor means lost income, lost income means reduced spending, and reduced spending slows down the entire economic engine.
With this in mind, it’s easy to see that the damage caused by the shutdown increases in scale with time. The sky is not falling, but a storm is brewing. The longer the shutdown lasts, the worse the storm gets — and if it lasts too long, we run the risk of tripping into disaster.
That disaster is the debt ceiling, which is expected to come crashing down around October 17.
It’s still unclear what effect the current shutdown will have on Congress’s ability to address the debt ceiling issue, but a survey conducted by Reuters suggests that most economists — 40 out of 51 polled — think that the chance of government default is still less than 10 percent. Some economists did think that the risk was higher than that, but none put the likelihood more than 50 percent.