Shutdown Fuels Economic Concerns as Pressure Mounts on Boehner

Zlatica Hoke
October 04,2013

WASHINGTON — The continued budget impasse between Republicans and Democrats in the U.S. Congress is raising concerns that the rival parties may fail to agree on raising the U.S. debt ceiling by mid-October, which could cause the government to default on its debts. Both the U.S. Treasury and the IMF have called on lawmakers to end the budget crisis as soon possible to avert possible damage to the global economy.

Polls show a growing number of Americans blame the Republican Party for the government shutdown. In recent days, the spotlight has focused mostly on one lawmaker: House Republican Majority Leader John Boehner. As Speaker of the House, he has blocked a vote on a temporary budget measure that would keep spending at current levels. There is support for such a measure among all Democrats and some Republicans.

U.S. President Barack Obama joined the chorus of Boehner critics on Thursday while speaking to a group of construction workers in a Washington suburb.

"There are enough Republicans and Democrats in the House of Representatives today that if the Speaker of the House John Boehner simply let the bill get on the floor for an up or down vote, every congressman could vote their conscience, the shutdown would end today," said Obama.

Boehner has so far refused to allow a vote on temporary funding that could return 800,000 federal employees from a current furlough. Political pundits cite two reasons this has not yet happened, despite a large majority of Americans disapproving of the shutdown. One is that Boehner would lose the support of his conservative caucus and, perhaps, his position as Speaker. The other is that he would lose clout in bargaining with Democrats on a new U.S. budget.

Republicans, meanwhile, have criticized the Democrat-led Senate for rejecting the idea of continuing to fund some agencies and programs, such as cancer treatment for children at the National Institute for Health.

On Thursday, a group of Republicans sought to draw attention to the hardship that a lack of funding for that program will cause. Renee Ellmers, a North Carolina Republican and a former nurse, spoke passionately on behalf of children with cancer and their families.

"If you've ever seen the looks on a parent's face when they are told that their child has cancer and then you take their hope away, the moment that they know that they can fight for it, they will," said Ellmers.

According to one estimate by Massachusetts-based IHS Inc., the shutdown of the federal government will cost at least $300 million a day in lost economic output. Those losses could still increase.

IMF chief Christine Lagarde warned on Thursday that the U.S. budget crisis could also hurt the global economy.

"The ongoing political uncertainty over the budget, over the debt ceiling, does not help. The government shutdown is bad enough. But failure to raise the debt ceiling would be far worse and could very seriously damage not only the US economy, but also the entire global economy," said Lagarde.

The United States must raise its debt ceiling by October 17 to avoid the possibility of defaulting on its debts.