Just hours before a potentially catastrophic default, the Congress of the United States passed legislation to extend the nation's borrowing authority and end the government shutdown. The compromise legislation, which was initiated in the Senate and ultimately passed by the House of Representatives reopens the government until January 15, and allows the country to issue debt and pay its bills until February 7. It remains to be seen whether the bipartisan legislation to halt the unwise shuttering of the federal government and flirtation with renewed economic calamity is only a brief pause in the political warfare that echoes the worst of America's past or a turning point into something new and more hopeful. But it's better than the alternative.
The deal, which passed barely an hour before midnight on Wednesday, provides back pay for all federal workers and reimburses states who carried federal responsibilities during the shutdown, such as operating certain national parks. Government offices should be open by Friday. It also establishes a process to begin immediate negotiations on a federal budget for 2014 and corresponding national debt levels, with a hope toward avoiding the government-by-crisis atmosphere that's gripped Washington since the Republicans won the House of Representatives in 2010.
Though the measure is both a relief and welcome news, as presidential spokesman Jay Carney said yesterday, there have been "no winners" during the 16-day showdown.
According to the ratings agency Standard & Poor's the economy has lost $24 billion in direct economic activity as a result of the shutdown, with possible negative consequences for growth during the rest of the year. Housing, which showed signs of life before the budget battle, has felt the pain. The processing of home loans for first-time homebuyers, including many youth and people of color through the Federal Housing Administration, slowed to a crawl. Small businesses owned by women and people of color struggled to get access to capital which is underwritten by loan guarantees from the federal government. And companies of all sizes couldn't get the basic economic information they needed from federal number crunchers to figure out what to invest in and where to do it.
In fact, instead of saving money for taxpayers, closing the doors of the government actually cost money. The budget think-tank National Priorities Project estimates that the direct bill of keeping the federal closed is as a high $3 billion due to the lost collection of fees and taxes, and the lost productivity of federal workers.
But federal employees, disproportionately people of color, paid a heavy price during the government shutdown. Hundreds of thousands were furloughed, with over a million more reporting to work without pay. During the height of the shutdown, more than a million and half families were left scrambling to figure out how to make ends meet.
Yet perhaps the harshest blow fell on those who could least afford it. Tens of thousands of the working poor, people of color and youth were left without the vital assistance needed to eke out a way forward. Programs like the pre-school initiative of Head Start, the Women Infants and Children (WIC) nutrition effort, and mass immunization drives through the Centers for Disease Control all saw painful disruptions during the shutdown. Additionally the cleanup up of toxic waste sites, concentrated in poor areas and communities of color, was halted entirely during the fight in Congress over the nation's priorities.
But the key question is, "What was all the hand-to-hand combat in Congress and the damage it caused really about?" Ostensibly it was about Obamacare, but the Affordable Care Act is a mere footnote in the agreement passed by Congress yesterday. Its only mention of Obamacare is to verify the incomes of those who will receive subsidies under the law to help pay for their health plans. That's a far cry from the stated goal of Senator Ted Cruz to use the shutdown to "end Obamacare." Is there something else at work?
An important thing to remember is that the shutdown and subsequent default threat were not accidents. As I have written previously, they were in the works by the tea party for three years. Just two weeks ago, The New York Times reported that conservative groups spent $200 million to gear up the government shutdown. Who knows with last night's agreement whether these groups have been defeated or have merely fallen back.
But an indication of where things might be headed is the response to one of the darkest moments of the shutdown. It occurred last Sunday when the founder of the tea party-backed advocacy group, Larry Klayman of FreedomWorks, demanded that President Obama come out the White House with his "hands up" and "leave town" in front of an angry crowd at the Washington Monument and in the shadow of a Confederate flag. Later that day, the crowd and the Confederate flag made their way to the White House to echo the point.
Yet there was something about seeing the gathering of an all-white crowd with a Confederate flag in front of the dwelling of a black family that changed the political dynamic in Washington. Of course the Republican Party had plummeted in the polls and surveys were showing that for the first-time Democrats could win back the House in 2014. Yet that was true days before the protest when the same deal that passed last night had fallen apart. But after Klayman's ultimatum and the arrival of his supporters at the Executive Mansion things began to move.
The previously deadlocked Senate loosened up, cut a deal and cleared it with an overwhelming 81 votes out of 100 senators. Even the bitterly divided House of Representatives managed to muster what in that body is an overwhelmingly bipartisan vote of 285 members.
Perhaps this new-found spirit of cooperation will hold. It will be tested again in just 90 days when the temporary spending measure approved last night will expire with the borrowing authority soon thereafter.
Either way, it's clear that America cannot go on making the mistakes of either its distant or recent past.