Anatomy of a Debt Deal: What Happens Next

Oct 16, 2013 8:14pm
RT government shutdown RTX14A5S jt 131013 copy 16x9 608 Anatomy of a Debt Deal: What Happens Next

(Jonathan Ernst /REUTERS)

The worst of the government shutdown-debt ceiling crisis has been averted, but just barely and only temporarily.

The plan passed by Congress Wednesday evening to reopen the federal government and avert a first-ever U.S. default set two new, high-stakes deadlines just weeks from today:  On Jan. 15, the government will run out of money again and, on Feb. 7, the debt limit will be maxed out unless Congress acts.

Here’s what we know and what an approved deal would mean for the days ahead:

1. Federal Government Back in Business on Thursday

With President Obama’s signature now on the bill, the wheels of government will begin turning again, albeit slowly.

Roughly 450,000 presently furloughed federal workers will be expected back on the job Thursday, or their next regularly scheduled work day.

“Employees should expect to return to work in the morning,” OMB director Sylvia Mathews Burwell said in a statement late Wednesday night.

Notice to federal workers was expected to be posted online, sent out by email and, in some cases, delivered by robo-call.

The Office of Personnel Management says some leeway may be given to employees who might not be ready to get back on the job so abruptly:

 “Guidance concerning when furloughed employees should come back to work at the conclusion of the shutdown would have to be tailored to the specific situation. In the absence of such guidance, agencies should apply a rule of reason in requiring employees to return to work as soon as possible, taking into account the disruption in the lives and routines of furloughed employees that a shutdown causes.”

As workers come back, the lights will go on in places that had gone dark.  If the 1996 shutdown/reopening is any guide, the national parks and monuments will be among the first to have the gates lifted and barricades removed.

It also will mean:

  • Passport offices and veterans benefit centers will resume normal hours for services.
  • The National Institutes of Health will restart evaluation of grant applications and accepting patients for clinical trials.
  • Teams of nuclear regulators and FDA food safety inspectors will be back at full strength.
  • Government websites, including the National Zoo Panda Cam, will come online.
  • Food aid through the Women, Infants and Children (WIC) program will start flowing again.

This will be a fluid process that can take hours or even days, just as we witnessed with the actual shutdown of services on Oct. 1.

Starting and stopping government, as one official put it, is not a “lights off, lights on” scenario.

FULL COVERAGE: Government Shutdown

2. Back Pay on the Way

The deal sets into motion re-payment of all “essential” federal workers – from the White House cook to Capitol Police officers and CDC scientists – who have been working the past 16 days without any income.  It will also send forgone wages to the 800,000 furloughed federal workers who spent time sitting at home.

The House approved back-pay for furloughed federal workers earlier this month, but the Senate never voted on the measure.  That was resolved on Wednesday night.

In 1996, federal agencies issued back-pay checks within days of the government reopening.  Employees who were regularly scheduled to work extra hours – and earn “premium pay” – were compensated for such 17 years ago.  It was unclear how soon the checks would go out this time.

MORE: Obama Hails Deal on Shutdown, Debt Scare

3. Start a New Countdown Clock!  Shutdown, Default Still on Horizon

The deal does nothing to resolve the bitter, underlying partisan differences on Obamacare, entitlements, taxes or spending that precipitated this mess in the first place.

The House and Senate are required to appoint budget negotiators and come up with a sweeping agreement by Dec. 13 – but nothing happens if they don’t get there.  If the track record of past “super-committees” is any indication, there’s not a lot of reason for hope that this will be successful.

The party differences could easily lead to another impasse, government shutdown and countdown to default in just a matter of weeks.  Government funding will run out on Jan. 15, 2014, under this deal.   The debt ceiling is extended to Feb. 7, 2014.

One ominous sign of what could be to come:  Sen. Ted Cruz today said he plans to continue a stubborn attack on Obamacare that was largely responsible for the current crisis.   Cruz aide Amanda Carpenter tweeted ABC’s Rick Klein today that the new deadlines – Jan. 15 and Feb. 7 – are the new battlegrounds.

4.  Affordable Care Act Largely Unscathed:  Not Defunded, Delayed or Substantively Changed

Republicans failed to extract any major concessions from Democrats and President Obama on changes to the Affordable Care Act.  Attempts to strip the law of all funding, to delay the entire law, to delay just the individual mandate or to delay the medical device tax, among other changes, all fizzled.

The one thing the deal would change about the Affordable Care Act is that it would  nominally strengthen anti-fraud protection for government subsidies in the new health insurance marketplace.

Republicans have been concerned that existing protections are insufficient, relying on a consumer’s self-reported income and randomizing compliance checks to enforce a limit on subsidies to only those earning more than 400 times the federal poverty level.

Under the deal, the HHS secretary reportedly would be required to personally certify that proper income verification tools were in place and mandate an independent audit from the inspector general.

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