Welcome to the non-government shutdown

Posted: Oct 01, 2013 10:04 AM
Welcome to the non-government shutdown

Last night, after the House of Representatives passed its latest continuing resolution, this time funding the federal government through November 15th while also delaying the individual mandate for a year and cutting Obamacare subsidies for congressional staff, Senate Majority Leader Harry Reid, D-Nev., announced he would not name any conferees to negotiate a short-term funding bill.

Minutes later, President Obama's budget director Sylvia Matthews Burwell, directed all federal agencies to implement their govenrment shutdown plans. But that doesn't mean all, let alone much, of the federal government will actually shutdown.

First of all, late Monday night, Obama signed a bill exempting all military pay, and even some pay for Defense civilians and contractors, from the government shutdown.

Second, Obama and the Democrats wisely stashed away over $1 billion in various Department of Health and Human Services slush funds to keep Obamacare implementation running uninterrupted. So despite the fact that 52 percent of HHS employees will be furloughed, the shutdown will not touch Obamacare.

Also, federal airport security personnel will all report to work under the shutdown, as will every federal employee who secures our borders. FBI agents will also report to work, although no new agents will be trained, and the Department of Justice will continue criminal cases but not civil ones.

Federal parks will be closed, the National Zoo's panda cam will be turned off, and NASA will be shutdown almost entirely, but the mail will still be delivered on time, federal prisoners will still be imprisoned, and most Head Start and food assistance programs will continue as scheduled.

Outside of Washington DC, very few Americans will even notice the "shutdown" is going on.

The story is quite different when it comes to the impending cash crunch at the Treasury Department due to the debt limit.

According to both the Congressional Budget Office and the Bipartisan Policy Center, the Treasury Department will only have $30 billion cash on hand to pay the federal governments financial obligations as of October 17.

Then, on October 23, Treasury is scheduled to make a $12 billion payment to Social Security beneficiaries followed by a $6 billion interest payment to bond holders on October 31. That should leave Treasury with around $12 billion.

But then on November 1, Treasury must $18 billion to Medicare providers and another $25 billion to Social Security beneficiaries.

That is when the real pain kicks in.

Sometime before November 1st the debt limit will be raised, the government will be funded for another fiscal year, and Republicans will extract some concession from Obama on Obamacare.

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