October 9, 2013

House Republicans dismiss warnings of government default

The treasury secretary insists that default is inevitable ‘if we don’t have enough cash to pay our bills.’

The Associated Press

(Continued from page 1)

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In this July 24, 2013 file photo, Rep. Justin Amash, R-Mich. speaks on Capitol Hill in Washington. Hard-line House Republicans are dismissing dire warnings that a government default would wreck U.S. and world economies as another case of hyperbole from an Obama administration that cried wolf about the likely impacts of automatic spending cuts and partially shutting down the government.

AP File Photo

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Furloughed workers, just like most of those still working, won’t see that retroactive pay until the government is back into full operation. To the degree they can’t pay rents, mortgages and other bills, or quit going to restaurants, the economy could suffer. But that hasn’t been felt yet on a nationwide scale.

In terms of eventual government spending, the partial shutdown is so partial that it probably will add to the federal deficit rather than shave it, some economists say.

Some Democrats and independents agree that exempting certain agencies and employee categories from the shutdown might make it easier to keep the other portions closed for weeks, or even months.

“Certainly we want to mitigate whatever impacts we can,” said Sen. Angus King, a Maine independent who caucuses with Democrats. But it makes the partial shutdown “more tolerable,” he said, “and the problem is, it becomes a selective problem. Some people don’t suffer the effects, and others get hammered. It’s sort of the lifeboat approach: who gets in, and who doesn’t.”

The partial closure comes as agencies also deal with the automatic, across-the-board budget cuts known as sequester. The administration, led by then-Defense Secretary Leon Panetta, repeatedly warned that cuts that went into effect on March 1 would have a debilitating effect on government operations, with the possibility of “hollowing out” the military.

So far, people outside the military community haven’t noticed. Many lawmakers now embrace the sequester cuts as an acceptable approach to trimming spending.

“When you’re in the fifth year of Chicken Little ... folks do not believe the president on this,” Rep. Tim Huelskamp, R-Kan., said of Obama’s tenure in the White House.

The partial shutdown, wrote conservative blogger Erik Erickson, shows that “life will go on. Americans will see they really can get along without Washington’s constant, daily interference in their lives.”

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