Cars pulled up to the US Merchant Marine Academy in Kings Point, Long Island, the day after celebrating its 70th anniversary, to take cadets back home. since the service academy was shuttered by the federal government shutdown.
On Monday, Day 7, 7000 the US Department of Veterans Affairs employees were furloughed and the regional offices closed. Veterans who need assistance for PTSD will also have to wait.
Businesses and homeowners anticipating Hurricane Sandy relief will have to wait because there aren't the federal workers to process the applications; small businesses hoping for a loan also will have to wait.
Also on Monday, Day 7 of the government shutdown, there was a tornado warning in our area. Had there been an emergency, FEMA workers would have had to have been brought back from furlough, and put into action without pay.
There are reports that a salmonella outbreak was not caught swiftly enough because only a skeleton crew of food inspection workers were on the job.
And five families whose loved ones were killed in Afghanistan over the weekend are finding the death benefits they need to pay for funerals and get to Dover to receive the bodies, withheld, prompting universal outrage.
These are just a small sampling of what is happening in communities across the country - as 800,000 federal employees are furloughed, their work stopped, and businesses and investors get increasingly anxious about the impact on the economy and just how far the Radical Republicans will take their brinksmanship. Will they refuse to raise the debt ceiling, causing the US to default on its obligations for the first time in history, forever destroying the "full faith and credit" of the US government?
And that Library bond referendum on November 19? Well, the $10.4 million bond may cost the community $20 million because interest rates are likely to rise if the nation's credit rating is downgraded for only the second time in history (the first was in 2011 when Republicans went through a similar show of brinksmanship, which has cost American taxpayers more than $1 billion in higher interest costs. That is, if there is any credit to be had at all.
It may not be as dramatic as the lights and water being shut off (that will come when if the US defaults), but the government shutdown is having real, even devastating, impact on individuals and families.
Take FEMA, for example, which is the lead agency for Hurricane Sandy relief: "Work on previously approved and ongoing long-term recovery projects will, in many cases, be delayed due to furloughs of significant numbers of federal employees required to process and manage the funding for these projects. FEMA has also suspended the review and approval of new and pending disaster recovery projects, as well as most other work of the Agency, across the country that does not involve immediate threats to the safety of life and property," FEMA spokesman Dan Watson stated.
And what about the new disasters unfolding: flooding in Colorado, tornadoes, hurricanes threatening New Orleans and Florida?
"FEMA remains committed to supporting disaster survivors. Ongoing response operations to recent as well as any future disasters will continue because this work is funded by the Disaster Relief Fund (DRF), which did not lapse with other appropriations on September 30, 2013. Individual and housing assistance to disaster survivors, for existing or newly declared disasters, will also continue in the immediate term."
However, 86 percent of FEMA has been furloughed. And when there is a disaster, they have to be brought back, which has to affect response time.
And what happens when the Disaster Relief Fund is exhausted?FEMA workers "are having to, under less than optimal situations, still respond to Mother Nature, which doesn’t stop just because the government has shut down,: President Obama said in remarks during his visit to FEMA on Monday.
That goes for national security as well.
FBI agents are not reporting to work, 70% of the intelligence community have been furloughed, the border patrol agents are on the job, but not getting paid.
I wonder what will happen if terrorists think this is just a fine-and-dandy time to launch an attack like on Benghazi. I fully expect Rep. Darrell Issa will haul Secretary Kerry before his Government Oversight Committee to chastise him for letting Americans die, just as he chastised Sec. Clinton without taking a bit of responsibility for slashing the State Department's security budget.
How hypocritical and absurd for Rep. Randy Neugebauer's (R-Tex.) to castigate a Park Ranger for closing the World War II Memorial, blaming her for the closure he voted for and telling her that she should be ashamed of herself.
But more than 400 national parks and monuments- Yosemite National Park which just celebrated its 123rd anniversary, and the Statue of Liberty among them - are shuttered, costing local businesses $30 million a day in lost revenue, not to mention the millions of people just as disappointed to be barred from as the World War II veterans.
A government shut down does not save a dime nor cut the budget deficit or debt. It makes these worse. It is costing $300 million a day in lost output every day the government is shut down. And we are actually paying the workers for the time they are furloughed. It costs money to shut down offices and even more to re-start operations.
Here are some other consequences of the government shutdown:
- 800,000 federal employees are being furloughed and a million more are forced to work without pay
- 3.6 million veterans may not receive benefits if the shutdown lasts over two weeks.
- The Centers for Disease Control will have to stop its flu prevention program, just as flu season begins.
- Food safety inspections will scale back their work, exposing millions to risk.
- About nine million mothers and pregnant women will no longer receive nutritional assistance from the Department of Agriculture's Women, Infants, and Children program.
- The Small Business Administration will be unable to process new loans, potentially slowing new small business growth.
- Head Start programs across the country will start closing, ending educational and health benefits for low-income children.
- Researchers funded by the National Institutes of Health, have to halt their research, possibly jeopardizing years of work.
- Disability benefits could be interrupted, leaving vulnerable Americans without the support they rely on.
- Social Security will be unable to process new disability claims in a timely manner.
- Department of Veterans Affairs may be forced to furlough up to 20,000 claims processors -- wiping out all of the recent progress made reducing the backlog. There could be lapses in care. During the 1995 shutdown, some military hospitals canceled appointments and even some surgeries. The VA believes that after two or three weeks "benefit checks it issues, including disability claims and pension payments will be disrupted." (see http://action.votevets.org/shutdown)
- More than 15,000 EPA employees across the country have had to stop working on projects that fight climate change and protect air, lands, and water. Clean-up of hundreds of hazardous waste sites will have to be suspended. "Without those EPA cops on the environmental beat, communities across the country have been left without anyone to hold polluters accountable and protect our air and water. And sadly, the EPA’s recent efforts to address climate change have ground to a halt," says Vanessa Kritzer of the League of Conservation Voters.
And the economic ramifications can derail the recovery, already fighting the headwind of the Sequester.
The federal government is America’s largest employer, with more than 2 million civilian workers and 1.4 million active-duty military serve in all 50 states and all around the world. Obama noted, "In the event of a government shutdown, hundreds of thousands of these dedicated public servants who stay on the job will do so without pay -- and several hundred thousand more will be immediately and indefinitely furloughed without pay.
"What, of course, will not be furloughed are the bills that they have to pay -- their mortgages, their tuition payments, their car notes...They are the customers of every business in this country. And they would be hurt greatly, and as a consequence, all of us will be hurt greatly, should Congress choose to shut the people’s government down.
"Across the country you've got farmers in rural areas and small business owners who deserve a loan, but they're being left in the lurch right now. They might have an application pending as we speak, but there's nobody in the office to process the loan. The SBA gives a billion dollars of loans a month to small businesses.... Right now those can't be processed because there's nobody there to process them," Obama said.
"So a shutdown will have a very real economic impact on real people, right away. Past shutdowns have disrupted the economy significantly. This one would, too. It would throw a wrench into the gears of our economy at a time when those gears have gained some traction," Obama said.
Meanwhile, the stock market, which had hit record highs, more than doubling in value from the 2008 recession and revitalizing retiree's 401Ks, has been plummeting like a stone - and that's only with the partial government shutdown - dropping more than 100 points a day. From the record high set on Sept. 18, 15,676.17, the market has tumbled to 14,775 on Wednesday - and that was before a growing number of Republican Senators and Congressmen were pooh-poohing the impact of defaulting on debt, which every actual economist and CEO such as Warren Buffett have warned would be like a nuclear bomb (self-inflicted) being detonated on the economy, an economic apocalypse which would make the crash of 2008 look like a bad day in the market.
By being so clueless about the government shutdown, and with Republicans now taking up the talking points that (a) not raising the debt ceiling would not lead to default and (b) default would be no big deal at all, it now seems more likely that Republicans will go for broke and crash the US economy by blocking the increase in the debt ceiling.
But even if you take this absurdity to heart, what they are really saying is that there is enough money coming in without increasing borrowing to pay prior obligations (that is, goods and services already purchased), because there is enough to pay bondholders and investors, so you wouldn't technically be in default. Even if that were true, what they are really saying is that there is no need to pay the federal workers, soldiers, retirees - basically and literally stealing from the working stiffs to give to the wealth-holders. Once again, workers would be cheated, just as they are in Detroit where a bankruptcy will leave retirees without pensions so that bondholders can be repaid.
In fact, the investor class is salivating at the "bargain basement" fire sale as stock and real estate prices tumble, and the killing they will make snatching up failed companies.
The Republicans also betray their utter stupidity about finance, the economy and even the way government works (which is not the same as a household budget, which by the way, families go into debt every day for mortgages, car loans, student loans and business start-ups), in cavalierly dismissing how the economy will be harmed.
Economists are forecasting that GDP could shrink 9% - that would mean a deep recession eclipsing the 2008 Recession - and trillions of dollars of wealth erased. The likely hike in interest rates would impose higher costs for everything from mortgages to car loans to business loans, and cost taxpayers billions more in higher interest payments without any increase in productive investments.
A default would cost New York State, alone, $2 billion.
“Congressional dysfunction has already hurt New York and the nation’s economies by fueling a lack of consumer confidence nationwide. Jeopardizing our full faith and credit is a new level of recklessness and irresponsibility that would have dire consequences and could cause irreparable damage to our economy,” said New York State Governor Andrew Cuomo.
And as there is a cascade of people filing for unemployment - just as there has already been a 500% increase in claims just since the government shutdown started - that puts more pressure on state and local budgets while robbing municipalities of income tax revenue.
A report by the U.S. Treasury Department from this month entitled “The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship” outlines the potential consequences: “In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth—with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression. Considering the experience of countries around that world that have defaulted on their debt, not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation.”
And what is the point of the government shutdown? To block 30 million Americans from access to affordable health insurance? Certainly not to reduce the budget deficit or national debt which are harmed by the shutdown and will be even more if Republicans don't raise the debt ceiling.
Speaker John Boehner has insisted on the fiction that Obama and Democrats refuse to compromise but that is simply not true.
In fact, the Democrats already have compromised - accepting the Republican's spending levels that continue the Sequester cuts by some $200 billion in spending.
"One thing that's gone almost unnoticed is how much Democrats already have conceded to Republicans on spending." said Senator Bernie Sanders (I-Vt). "Democrats, in agreeing to a $986 billion sequestration budget, accepted significantly lower levels of spending in a so-far futile attempt to win the support of Republicans." Senate Democrats wanted a $1.058 trillion budget to allow for spending on education and investment in R&D and infrastructure.
"The bill that is being presented to end the government shutdown reflects Republican priorities," President Obama said on Monday during a visit to FEMA. "It’s the Republican budget. The funding levels of this short-term funding bill, called the CR, is far lower than what Democrats think it should be. Nevertheless, Democrats are prepared to put the majority of votes on to reopen the government. So when you hear this notion that Democrats aren't compromising -- we're compromising so much we're willing to reopen the government at funding levels that reflect Republican wishes, don't at all reflect our wishes.... "
Clearly the Democrats have compromised. But Obama should not negotiate further during the government shutdown or to avoid crashing the economy if Republicans refuse to raise the debt ceiling. Obama had tried that tact - in 2010, in 2011, and Republicans have clearly embraced hostage taking as the means to achieve their aims. Indeed, every time Obama concedes, the Republicans move the goalpost, as they did to refuse the negotiated "Grand Bargain" that led to the Sequester.
Conservative Rep. Marlin Stutzman (R-IN), has the audacity to assert, “We’re not going to be disrespected. We have to get something out of this. And I don’t know what that even is."
Who is being disrespected, exactly? Grover Norquist has told his sycophants that Republicans should continue to dangle the threat of government shutdown on a monthly basis as a "leash" on Obama.
The result is that the US has had to endure one manufactured crisis after another, each time deflating the economic recovery, provoking uncertainty for businesses and investors, undermining jobs creation while prolonging the misery for average Americans.
What is the endgame? It is less about throwing monkey wrenches into Obamacare than to derail Obama and undermine the Presidency altogether, in effect to let the minority rule.
Karen Rubin, Long Island Populist Examiner
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