While the US Congress has rushed through a hastily negotiated agreement between Democrat and Republican politicians to raise the country’s debt ceiling, ending a 16-day government shutdown, the deal has not been achieved without alienating the American people. Faced with the almost unthinkable prospect of a US incapable of paying its bills, Barack Obama signed off on an agreement last night that will run up to mid-January 2014 and approves a range of spending plans, following a 81 to 18 majority in the Senate and a 285 to 144 victory in the House of Representatives.
The developments will be a relief to many American citizens, who have looked on in despair as internal political disputes between Tea Party Republicans and Obama’s Democrats over the President’s signature healthcare reforms left around 800,000 so-called “non-essential” public sector workers sent home without pay. Those furloughed workers will now return to their jobs to receive remuneration covering the two weeks they went without pay – but at a cost to the taxpayer of $3.1 billion (£1.91bn) in lost government services, according to informatics firm IHS.
Essentially, the Republicans made no significant inroads in derailing the President’s budgeting plans for universal healthcare for US citizens – commonly known as “Obamacare”. In fact, both chambers passed an almost identical bill to what was originally proposed, apart from slight adjustments to the health law that guard against citizens making fraudulent claims for government to pay premiums.
With a high likelihood that the disputes could rear its head again in three months’ time when the current deal runs out, Obama asked for more unity among both sets of politicians. “We can begin to lift this cloud of uncertainty and unease from our businesses and from the American people,” he said. “Hopefully next time it won’t be in the 11th hour. We’ve got to get out of the habit of governing by crisis.” Obama also admitted that the shutdown had made the people “completely fed up with Washington”.
The crisis had wide-reaching effects on the American economy, most notably tourism, with major monuments and national parks closed across the country. The National Park Service said that $76 million (£46.9m) was lost in national revenue each day due to visitors being turned away from open spaces, while the official tourism corporation of Washington DC cited a 9% decrease in hotel occupancy from the final week in September to the first week of October.
On 16 October, financial ratings agency Standard & Poor painted a gloomy overall picture by revealing that the shutdown to date had “taken $24 billion (£14.8bn) out of the economy”, equivalent to $1.5 billion dollars per day, and had “shaved at least 0.6% off annualised fourth-quarter GDP growth” for 2013.
Image of Barack Obama courtesy of spirit of america / Shutterstock