Will Federal Reserve Raising Interest rates cause Government Shutdown by months end?

[Rx_]

Will Yellen's rate increase affect the budget process to the point of a Government Shutdown? Will the government shutdown be in effect by end of month? THE POLL - we will know the result by month's end. 20 day poll, multiple choice.

The bank cartel, the Federal Reserve, has promised it will raise Interest Rates this month. While this may be the 80+ time it has backed off, some feel it must really happen this time.

Meanwhile, Congress just returned Sept 8 to start on passing a budget. Neither side of the isle has done much of anything until today. Congress has 10 working days to pass a budget and avert a Government Shutdown.

While raising Interest Rates on the Government Debt doesn't sound like a big deal, the government debt isn't a small thing. Measured in dollars, in terms of GDP, and many other terms, it is the highest ever in peacetime.

Meanwhile, the budget has automatic raises, automatic growth and new "must haves". At the same time, so many people are suffering economically, the tax revenues are stressed to say the least.

In theory: a zero interest rate where the government is making "interest only payments" allows for unlimited spending. If the rate is increased just 0.25%, the "interest only" payment on $20 Trillion (20 million x million) could equal a huge part of the total tax revenue.
In other words, an increase for the Federal Reserve means money must be taken from other government income.

We can watch the Debates, however the rubber hits the road in the next three weeks. The Budget is real while a debate is just some promises.

 

[Frothingslosh]

There's going to be grandstanding galore. I believe it was Cruz who was promising to include a measure de-funding Planned Parenthood as an absolutely-must-include provision on the budget. That alone will guarantee a shutdown if it happens and sticks.

 

[Steve R.]

Meanwhile, Congress just returned Sept 8 to start on passing a budget. Neither side of the isle has done much of anything until today. Congress has 10 working days to pass a budget and avert a Government Shutdown.

The government shutdown issue requires clarification.

Should the Congress fail to dump a budget proposal on Obama's desk by the deadline, Congress can be legitimately blamed for "shutting down the government".

However, if Congress does dump a budget proposal on Obama's desk by the deadline and Obama veto's any of spending resolutions that results in a government shutdown, then it is Obama who has "shutdown the government".

Congress has the "power of the purse" and is under no obligation to acquiesce to the budgetary demands of the President. Essentially Congress decrees to the President a spending "allowance".

Obama, to get his "allowance", to avoid a government shutdown needs to negotiate with Congress.

 

[Frothingslosh]

So, basically what you're saying is that if Congress, which is currently controlled by the GOP, includes an item or attaches a condition that they know 100% will be vetoed (like, say, yet another attempt to de-fund 'Obamacare' or perhaps an item completely de-funding the EPA as long as they continue to talk about Climate Change), that it's entirely the President's fault that the government is shut down?

It must be wonderful, living in a world where fault for misbehavior and assorted asshattery can be passed so easily and completely.

Sorry, but the fact is that when Congress and the White House are controlled by opposing parties, the only budgets that get submitted until the deadline is about to happen are ones that the White Houes absolutely will never sign. The Democrats did it to Bush, and the GOP does it to Obama every year.

 

[Steve R.]

Sorry, but the fact is that when Congress and the White House are controlled by opposing parties, the only budgets that get submitted until the deadline is about to happen are ones that the White Houes absolutely will never sign. The Democrats did it to Bush, and the GOP does it to Obama every year.

If the White House "absolutely will never sign"; Congress itself has an equal ethical imperative to not authorize a spending resolution it "absolutely will never approve". The US electorate is between a rock and a hard place.

Just because Obama will veto something is not an excuse for Congress to knuckle-under and rubber stamp a spending resolution. Obama is not a dictator. Congress needs to develop some fortitude, stand-up for itself and pass the spending resolutions. Obama needs to learn to work with Congress.

 

[Frothingslosh]

Obama needs to learn to work with Congress.

Yeah, he tried working with the GOP after he was elected. They moved the goalposts every time. There were times he ACCEPTED their demands straight out, and the just up and found new reasons to oppose him.

Remember, the GOP leadership was recorded straight-up saying immediately after the 2008 election that their top goal was to prevent his re-election, and they (on that tape) implemented a policy to oppose him on EVERYTHING. That is the playbook they're still using, even though it's seven years later and his re-election is history.

So how, precisely, does he work with a group whose official policy is to literally oppose him on EVERYTHING? I mean, hell, to the vast majority of current US Republicans (both politicians and voters), 'work with' is just code speak for 'do every single thing we tell you to do and we MIGHT accept it'.

 

[Steve R.]

Remember, the GOP leadership was recorded straight-up saying immediately after the 2008 election that their top goal was to prevent his re-election, and they (on that tape) implemented a policy to oppose him on EVERYTHING. That is the playbook they're still using, even though it's seven years later and his re-election is history.

Obama is playing the same repulsive game, in his case vilifying and denigrating the Republicans. Pointing to what you believe are distasteful Republican tactics does not obviate the fact that Congress grants the President an "allowance". Accordingly, Obama and Congress must reach a compromise to get a budget passed. That may mean that both Obama and Congress each have to "give" on their items that each claim are non-negotiable.

 

[Frothingslosh]

Actually, he's just taken to working around them, because otherwise literally nothing would get done. We need look no further than the hundreds of federal positions (especially judges seats) that have remained unfilled for years because it is has been virtually impossible to get candidates past the Senate. They even had to implement special rules just to prevent filibusters on top-level positions just so that enough people could get appointed to allow the executive branch to operate.

That said, keep in mind that the President's proposed budget was issued in February, and the GOP's proposed budget was issued in March (on a 51-48 vote with all Dems and a handful of GOP voting against). They have had six MONTHS to work on this, but they're just starting now. With that vote in March, this was always going to be a dogfight just getting an actual budget issued, much less presented to the President for approval or veto. (And more often than not, government shutdowns have been the result of inability to get a budget voted out, not Presidential veto.)

Also, keep in mind that while the President's proposed budget included tax increases for corporations and the ultra-rich, the GOP budget instead cuts more taxes from those groups while cutting money from assistance for the poor and elderly, and also mandates a full rollback of the ACA.

Ain't gonna happen, and we're probably looking at another case of the last time, where GOP leaders stated they were perfectly willing to let the US go into default on its debt to make their point, and the resulting credit downgrade ended up costing the US billions in higher interest rates.

One of the big names (Cruz, I think), too, is planning on ensuring a full de-funding of Planned Parenthood is part of any passed budget, and Obama has already said that will guarantee a veto.

I can also, if necessary, dig out any number of quotes from GOP leaders (especially Tea Partiers) stating that they will never compromise on anything. And yet you keep claiming that Obama is the one demanding that Congress "knuckle-under"....

Don't get me wrong - if the GOP were to put out a budget that was actually reasonable and Obama vetoed it because it didn't have everything in it that HE wanted, I'd be pissed. But I think the odds of a GOP-sponsored budget that is acceptable to non-extreme-right-wingers coming out before a shutdown are somewhere between slim and none. Even if it happens, we're going to see nothing but political gamesmanship until the actual drop-dead date.

 

[Steve R.]

That said, keep in mind that the President's proposed budget was issued in February, and the GOP's proposed budget was issued in March (on a 51-48 vote with all Dems and a handful of GOP voting against). They have had six MONTHS to work on this, but they're just starting now. With that vote in March, this was always going to be a dogfight just getting an actual budget issued, much less presented to the President for approval or veto. (And more often than not, government shutdowns have been the result of inability to get a budget voted out, not Presidential veto.

Well, we will be going in endless circles if this continues.

As an ending; I will simply reiterate that if Congress fails to submit a proposed budget to Obama by the deadline, it is the fault of Congress should there be a government shutdown. Should Obama, veto any of the spending resolutions which results in a government shutdown, then the responsibility for the government shutdown falls on Obama.

Of course, I need to reiterate that both Congress and Obama should negotiate a solution before the deadline.

 

[The_Doc_Man]

This is an extreme example of something that the Founding Fathers actually wanted to have happen. It comes under the heading of "Checks and Balances." If the president and Congress cannot agree on a compromise position, then nothing SHOULD be done. So Congress will, ho-hum, pass another continuing resolution while they hammer out what, if anything, they can get past a veto.

As to de-funding Planned Parenthood, I believe that cannot legally happen at this time. If the budget didn't fund PP, it would violate some provision or the other of one of the enabling laws for Medicare. Not that anyone would want it to happen, but if Congress passed a bill to de-fund PP and Obama signed it, Medicare recipients who happen to use PP services would suddenly have legal standing to sue the government to freeze or disallow that budget. Has to do with the fact that only PP offers certain services that are still allowed under Medicare and the law prevents interference with the medical rights of the patients involved. It gets a bit too complex for me, so I'm not exactly sure as to when they would gain that standing, but I know with certainty they would have legal grounds the moment the budget is passed and signed into law.

As to whether Obama and Congress can or can't get together, I don't know that I care. I am reminded of Mark Twain's comment: "Nobody's life, liberty, or property are safe while Congress is in session." That was said over 100 years ago and it is still equally valid today. A Congress that can get NOTHING done is the safest Congress of all.

One part of me actually WANTS this situation to become intolerable to the American people. That will perhaps give them the cojones to vote some of those recalcitrant obstructionist scoundrels out of office. If they aren't in office, they do less damage.

 

[AccessBlaster]

... If they aren't in office, they do less damage.

Those people are called lobbyist.

 

[Frothingslosh]

Doc, I'm right there with you on wanting everyone to vote. Unfortunately, the last thing that Powers That Be want is the informed electorate the Founders wanted. That's why we are seeing voting locations being cut despite multi-hour waits as-is, early voting being removed, insanely strict ID requirements (in response to a non-existent problem - since 2000, out of over 1 BILLION ballots cast, there have been 31 confirmed cases of voter fraud, or one per 32 million ballots cast), the rise of character politics over platform politics, the focus on single issues, etc. They don't WANT people voting outside the groups they already control. You don't see me post about that here, but trust me, I rant about it all the time elsewhere.

I saw a meme just yesterday indicating that Congress has an 11% approval rating but a 94% retention. I don't know how close to accurate those numbers are (probably not very), but I DO know that incumbents have an overwhelming advantage. I'm guessing the numbers are more like 30% approval and 80% re-election, which is still nuts. The problem, though, when you get down to it, is the two-party system. With Bernie Sanders being the primary exception, you as a rule need to toe either the D or R party line, or you just don't get elected. And if someone loses or retires, then they can just round someone up with the same positions and send them into the trenches to take up where the previous person left off. They know that they can rile up each of their support bases and get them to vote for them because there are no other viable options. It's why George Washington opposed the entire party system in the first place, for what good it did. Personally, this is one way in which I very much prefer the Parliamentary system and the coalitions that need to be made when there are 3-6 viable parties all fighting for a share.

Also, yes, we really do need to shoot all the lobbyists.

 

[Steve R.]

Personally, this is one way in which I very much prefer the Parliamentary system and the coalitions that need to be made when there are 3-6 viable parties all fighting for a share.

If we had a Parliamentary system Obama would be out of office. The process of governance would have been restored.

 

[Frothingslosh]

If we had a Parliamentary system Obama would be out of office. The process of governance would have been restored.

If we had a Parliamentary system, virtually the entire Congress would be out of office. Let's not play games here, Obama is hardly the dictator the Right is so desperately trying to portray him as. You don't get to say to someone "We will not allow you to succeed at anything" and then call THEM the problem.

 

[AccessBlaster]

... You don't get to say to someone "We will not allow you to succeed at anything" and then call THEM the problem.

As long as the reverse is true.

 

[Steve R.]

Pure speculation that the "virtually the entire Congress would be out of office". What we do know is that there is currently a Republican majority in Congress. Based on that, one can make the speculative assumption that the Republicans would hold a majority in a hypothetical Parliament.

 

[Frothingslosh]

Talk about completely missing the point.

Just because the GOP holds a majority in a two-party system, it doesn't automatically follow that they would hold the same majority under a, say, 5-party parliamentary system. The problem is the two-party system, not the rules of a congress vs a parliament.

Also, the parliamentary system allows for the removal of a chief executive if the situation actually becomes untenable, at the cost of EVERYONE being up for re-election when it happens. (Votes of No Confidence generally result in the dissolution of the sitting government. It might even be a requirement.)

 

[Steve R.]

Just because the GOP holds a majority in a two-party system, it doesn't automatically follow that they would hold the same majority under a, say, 5-party parliamentary system. The problem is the two-party system, not the rules of a congress vs a parliament.

You have a point there. The Republicans for example are really an amalgamation of at least two parties. Even if divided into discrete smaller parties, the voting of those who used to be Republicans may still mimic the current Republican majority. Some of the Democrats may, given the chance, spin-off into another (as yet unnamed) minority party. The spin-off Democrats may no longer feel compelled to follow the party line. Given current trends, Obama would still be out-of-office thereby allowing governance once again to proceed.

 

[Frothingslosh]

And yet last I checked, Obama wasn't the one blocking every single nomination and action required to allow the executive branch to do its job. He's not the one spending hundreds of millions of dollars investigating something that has his own 9 previous studies have shown were Congress's fault, not his. He's not the one who has spent billions of dollars over the last five years attempting to repeal a healthcare plan the public at large is actually in favor of. He IS the one who, early in his administration, tried to compromise repeatedly only to be rebuffed every time, told that only the only way to get something done would be to do it the GOP way, and then when he tried that, having it blocked anyway.

That would be the GOP. Your beloved GOP are the ones standing there asking "Why are you making me hit you". The ones who, over the last seven years, have well-earned the nickname "The Party of No". The ones who have admitted to a game plan of "The President Succeeds at Nothing", and then have somehow convinced people like you that it's his fault, not theirs.

I don't think he's by any means perfect - honestly, I'm pissed Guantanimo is still open, I'm ridiculously pissed that he is expanding the domestic spying Bush II put in place, I think it took him entirely too long to get out of Afghanistan and Iraq, and I think he should have started going around the obstructionist GOP several years sooner than he did.

But let's call a spade a spade - you're calling him the problem, but he's the one who TRIED to work with the GOP. He tried to work with them, and they said NO. He tried to compromise, and they said NO. He even, early on, said "Fine, we'll do it your way this time" and they still said NO.

Obamacare is based DIRECTLY on Romneycare, which the GOP called a spectacular success, and yet because a black Democrat wanted to do the same, it was suddenly a direct assault on America, and you bought it.

Obama withdrew American troops from Afghanistan in direct compliance with a GOP sponsored, Bush-signed law REQUIRING the withdrawal of all US troops from there by a certain date (2010? I don't have time to go look it up), but the GOP suddenly decided that was a treasonous assault on American interests, and you bought it.

The American economy was in freefall after 8 years of Bush II, but the GOP blamed him for it, and you bought it.

The GOP blocked such an insanely high percentage of Obama's nominations that the Democrats had to invoke the nuclear option, so the GOP labeled him a dictator, and you bought it hook, line, and sinker.

Do you see the pattern here? The people currently blocking the ability of the US Government to function are not in the White House. They're the ones currently in control of the entire Congress, who successfully shut down the Democratic Senate for 6 years via filibuster, and who now proudly announce to the world that they will NEVER compromise with Obama, and somehow you make that his fault.

Honestly, you're sounding even less in touch with political reality than was Bladerunner, and that idiot was convinced that there is some grand liberal conspiracy running to destroy the US and turn it over to either Satan, ISIS, or both.

 

[Steve R.]

Your beloved GOP ..

Think again. I have no love for the mainstream Republicans. Where they are wrong, I will point it out. See my somewhat randomly selected post that I wrote in 2009. Also: Romney on the "failed" Socialist Countries of Europe which I wrote on Jan 21, 2012.

Under blame Bush the US economy was over-stimulated and we over-consumed. The bubble then burst. The US went into a recession. So I find it somewhat disingenuous for Romney to hold Europe out as an example of failure when the US economic system itself failed.

The American economy was in freefall after 8 years of Bush II, but the GOP blamed him for it, and you bought it.

Sorry, but I have blamed Bush II for the economic mess. In my 2009 post, I referenced that: "Bush was just a shallow half-baked Reagan wannabee."

My "finger-of-blame", as you have noticed, is currently pointed towards the Democrats as criticism, today, needs to be pointed towards them.