THE US Congress passed a Bipartisan Bill Which was signed into law by President Barack Obama on October 17 to end a 16-day government shutdown and avert a historic debt default by the world’s largest economy that could have global repercussions. The Bill will fund the government through January 15 and allow the US Treasury to increase the Nation’s borrowing authority through February 7, 2014.The crisis began on October 1 with the partial shutdown of the US federal government after House Republicans refused to accept temporary funding measures unless President Barack Obama agreed to defund or delay his healthcare overhaul law. It escalated when House Republicans also refused to move on needed approval for raising the amount of money the Treasury can borrow to pay US bills, raising the specter of a catastrophic default. The 16-day long shutdown of October 2013 was the third longest shutdown in US history after the 18-day shutdown in 1978 and the 21-day shutdown in 1995-96.WHAT IS THE US GOVERNMENT SHUTDOWN?It is a political situation in which government stops providing for all but essential services. Unless Congress raises federal borrowing cap, government will shutdown.WHY THE SHUTDOWN?The US government’s fiscal year runs from October 1 to September 30. So the budget year ends on September 30. Government needed approval from the Congress for fresh spending for financial year 2014. This didn’t come because of differences between Democratic-led Senate and Republican controlled House over Obama’s healthcare law. House Republicans refused to pass the spending Bills (their Budget) that fund the government without provisions that would stop, delay Obamacare. Senate Democrats refused to link healthcare law with spending bill. Therefore Budget has not been passed till date.WHAT WAS SHUTDOWN?· Tourist sports and national parks were closed.· The latter’s closure means loss of 750,000 daily visitors, an economic loss of minimum $30 million for each day.· No federal loans disbursed.· No passports, gun permit-All offices that issue licences were shut.· All military personnel continued normal duty, but civilian employees furloughed.· Federal Reserve and other financial agencies stay mostly opened.· Criminal litigation continued.· Civil litigation curtailed.· Supreme Court was functioning.· Government research hospitals took no new patients.THE PREZ IS ESSENTIAL!· The president gets his salary during shutdown.· His salary-$400,000 p.a, mandatory spends.· House and Senate members get paid.· President’s staff of 1265 at White House dwindles to 436.EFFECTS OF SHUTDOWN· During the shutdown most non-exempt government employees were furloughed. This put about 800,000 public servants on unpaid leave. The White House estimates that a one-week shutdown could cost the US Economy $10 billion.· Small businesses faced delays in receiving loans from the Small Business Administration. Many of these companies might need to turn to alternative funding sources that charge much higher interest rate. One alternative source of credit charged interest rates of between 40 per cent to 100 per cent.· Since US Customs and Border Protection, the agency which regulates trade and inspects cargoes has not shutdown, imports and exports continued. However, many products required approval from other agencies before they can be brought into or out of the country. With many of these regulators furloughed, importers and exporters experienced delays.· The shutdown has interrupted Federal funding to Native Americans-especially tribes including programmes that involve health, nutrition and foster care. Some of them have had to suspend programmes immediately.· According to the Los Angeles Times a two-week shutdown would reduce GDP growth in the fourth quarter by 0.3 to 0.4 percentage point. By comparison, the GDP has grown by less than 2 per cent in 2013.· President Obama’s trip to Brunei, Malaysia, the Philippines, and Indonesia, where he was scheduled to attend the 2013 Asia-Pacific Economic Cooperation meeting in Bali would be cancelled due to the government shutdown. In addition, the Obama administration’s efforts to push forward the proposed Trans-Pacific Strategic Economic Partnership trade pact with eleven other countries including Japan, Australia and Chile were compromised.· The shutdown has undermined American strategic plan to protect its interests from rising Chinese Influence.
