US government Shutdown

[bilateralrope]

You assume they will be seeking election after provoking a default.

When exactly will they abolish elections ?

After the next election isn't an option if they lose it. Before isn't an option unless you can point out some way to get it past Obama and the democrat controlled Senate.

[Rogue 9]

Even if they controlled all the branches of government they couldn't abolish elections without passing major amendments to the Constitution (requiring ratification by 3/4 of the states, which would not happen, and even then the amendment process specifically bans depriving states of equal suffrage in the Senate through amendment) or resorting to naked force.

[Justice]

Are you conspicuously leaving revenues out of the equation, or simply saying "And don't forget about cuts" here? Honest question.

Simon and I have already come to the conclusion that we need to mathematically optimize the tax base*, so I felt no reason to bring that up again.

*Doing so would represent a move to a totally apolitical structure, so if that's lower rates, then it's lower rates. If it's higher rates, then it's higher rates. If it's lower rates for some and higher rates for others, then so be it. To get there I'd like to see all deductions be removed. You pay one rate from a look-up table, and that's it. I have no problem putting tax preparation places out of business.

Yeah, I saw the Laffer Curve stuff earlier but I just wanted to make sure. Never can be too sure on the internet and all that.

Of note, this shutdown seems to have destroyed the Republicans hope for governor of Virginia
http://www.timesdispatch.com/news/state ... f6878.html

Not that Cooch wasn't trying hard on his own, but this certainly hasn't helped. Bonus points, though, to the AP falsely accusing Terry MacAuliffe of perjury. The funniest comment I saw on that was "Terry MacAuliffe has been upheld as a tax."

[Simon_Jester]

You assume they will be seeking election after provoking a default.

That is daft paranoia. These people have no intention of staging a coup, nor would one be successful if they tried; their problem is that they live in this little propaganda bubble where everyone's opinion is with them and their opposition's victories are these bizarre, inexplicable natural disasters.

Imagine the distorted perspective on society as a whole you'd get if you got all your news from, say, SDN... Come to think of it, maybe you don't need to.

[Kitsune]

Of note, this shutdown seems to have destroyed the Republicans hope for governor of Virginia
http://www.timesdispatch.com/news/state ... f6878.html

Not that Cooch wasn't trying hard on his own, but this certainly hasn't helped. Bonus points, though, to the AP falsely accusing Terry MacAuliffe of perjury. The funniest comment I saw on that was "Terry MacAuliffe has been upheld as a tax."

From the shenanigans I have seen Cuccinelli try, I would vote for Satan before him
His witch hunts against climate scientists.
His telling universities that they should discriminate against gays

[Zaune]

That is daft paranoia. These people have no intention of staging a coup, nor would one be successful if they tried; their problem is that they live in this little propaganda bubble where everyone's opinion is with them and their opposition's victories are these bizarre, inexplicable natural disasters.

Imagine the distorted perspective on society as a whole you'd get if you got all your news from, say, SDN... Come to think of it, maybe you don't need to.

Actually, this is one of the better sites you could get all your news from. At least the comments under the article are sometimes from people who know what the fuck they're talking about.

[Simon_Jester]

I think you miss the point- SDN is not a representative sample of society, so listening only to people on SDN cannot give you an accurate picture of society as a whole. Moreover, the attitudes of people on SDN tend to parallel each other more closely than is true of randomly chosen people in real life.

If you get all your information from SDN, you are likely to think that 90% or so of genuinely intelligent people have identical political views. This is not true.

[ZOmegaZ]

*disregard*

[energiewende]

One way to avoid all this would be to pass a balanced budget. I don't see any case against the Republicans when it comes to the debt ceiling. Congress refuses to approve more debt but the Democrats demand to spend non-existent money anyway for ideological reasons. Hitting the debt ceiling does not mean default unless you continue to piss money into the wind, it only means you cannot accrue more debt. It is pure delusion.

[Terralthra]

One way to avoid all this would be to pass a balanced budget. I don't see any case against the Republicans when it comes to the debt ceiling. Congress refuses to approve more debt but the Democrats demand to spend non-existent money anyway for ideological reasons. Hitting the debt ceiling does not mean default unless you continue to piss money into the wind, it only means you cannot accrue more debt. It is pure delusion.

Congress passed the (deficit) budget resolutions, including House Republicans. If they want to avoid hitting the debt ceiling, they should avoid mandating (Constitutionally) that the Executive spend the money allocated by the budget resolutions.

[Broomstick]

One way to avoid all this would be to pass a balanced budget. I don't see any case against the Republicans when it comes to the debt ceiling. Congress refuses to approve more debt but the Democrats demand to spend non-existent money anyway for ideological reasons. Hitting the debt ceiling does not mean default unless you continue to piss money into the wind, it only means you cannot accrue more debt. It is pure delusion.

Please do not repeat the myth that only Democrats want to spend money. The Republicans do, too - on such boondoggles as drug testing everyone on welfare, on military projects that are unneeded, and on restricting peoples' ability to do things that should be private, like who you fuck and whether or not you have kids. To make it worse, the Republicans refuse to allow the government to raise funds (a.k.a. taxes) to pay for programs under any circumstances whatsoever. If you go to war you should pay for it there and then and not send the bill to your grandchildren, yet they did exactly that with Iraq.

[Purple]

So what now? Is the situation going to be resolved soon or will things get interesting?

[Ahriman238]

The nation is just hours away from a crucial deadline to avert default on its debts and Washington remains muddled in a risky legislative process that has the American people and the rest of the world holding its collective breath.

After a furious day of Republican proposals ended with a thud and no House votes to advance a plan, lawmakers have even less time to approve a measure to increase the nation’s borrowing power and end a dragging government shutdown.

Senate leaders say they are closing in on a deal that could pass the upper chamber with bipartisan support but it’s unclear how fast they can get it to the president’s desk.

Here’s where things stand:

*The Dow Jones Industrial closed 133 points down as hope for progress in Congress bubbled and then waned Tuesday. After markets closed, Fitch Ratings put the United States on “rating watch negative,” signaling that it could downgrade the country’s current AAA rating if the debt limit is not raised. Unless there’s clear momentum for a bill to be approved by both houses, markets could slip even further Wednesday morning.

*Key Senate leaders have resumed their on-again off-again talks after putting the negotiations on ice early Tuesday. By late Tuesday, ongoing talks between Democratic Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell appeared to be down to the dotting of I’s and the crossing of T’s. "The nerds have to work," McConnell spokesman Don Stewart said, referring to legislative staffers that are now writing the details. But, while McConnell and Reid will be armed with decades of experience and a keen understanding of procedure, Senate rules could still allow Tea Party favorite Sen. Ted Cruz or other dissenters to slow the consideration of the bill until after the Thursday deadline.

*Republican House Speaker John Boehner may be jammed. House leaders abruptly pulled a bill from consideration that would have reopened the government until December and lifted the debt ceiling until January. That measure failed to garner support from conservatives who wanted more health care-related concessions from Democrats, so Boehner nixed a Tuesday evening vote rather than face a damaging failure on the House floor. Without a clear proposal that could pass both the GOP-dominated House and the Senate, Boehner faces enormous pressure to put a Senate-passed compromise on the floor to be passed with Democratic votes, even if it risks a mutiny among conservatives in his own party.

*President Barack Obama has no public events scheduled for Wednesday, although he will meet behind closed doors with Vice President Joe Biden and Treasury Secretary Jack Lew. “My expectation is it does get solved but we don't have a lot of time,” he said in an interview Tuesday with WABC. “What I'm suggesting to the congressional leaders is let's not do any posturing, let's not try to save face, let's not worry about politics. Do what's right.” Obama did not speak with Boehner by phone on Tuesday, aides said.

The waning days of budget wrangling come as the U.S. government also faces immense global pressure to reach a deal. In an appearance Sunday on NBC’s "Meet the Press," International Monetary Fund Managing Director Christine Lagarde said that U.S. default “would mean massive disruption the world over.” Chinese Vice Finance Minister Zhu Guangyao slammed “the attitude of the Tea Party” and told lawmakers to “take concrete measures” to avoid default.

Even if a deal is formally announced Wednesday, there’s no guarantee that the long-awaited firm fiscal stability would last for long.

Most of the floated proposals from both chambers of Congress have only extended government spending and the debt limit by a number of months. A compromise now could set up similar fights for early next year.

People negotiate over everything. Where to go on vacation, how much to pay for a new car, how to merge international companies, and – as the American people have learned in recent weeks – how to fund the government and pay the debts of the most powerful nation on the planet.

Bargaining is so ubiquitous that there’s an entire research community devoted to understanding how people negotiate and what methods are most likely to lead to an optimal solution. So what does science say about the most successful negotiations? And are the lawmakers negotiating to end the shutdown and prevent default doing anything right?

“Right now, they’re really reflecting what bad negotiators do, based on decades of research,” says Michele Gelfand, a professor of psychology at the University of Maryland and an editor of “The Handbook of Negotiation and Culture.”

Gelfand says a large body of research shows that negotiators are heavily influenced by factors like the degree to which they view a problem as a “win-lose” situation and how accountable they feel to others who share their interests.

And, so far, that “win-lose” mentality is really interfering with a fiscal deal.

Researchers call that “win-lose” idea the “fixed-pie bias.” It’s the usually-erroneous idea that if one person in a negotiation wins, the other automatically loses. In other words, negotiators often believe that their gain is automatically the other side’s loss.

Study after study has shown that “fixed-pie” scenarios are much more likely to lead to bad agreements or outright stalemates.

Here’s a classic study that illustrates this idea: participants come to a lab and are asked to pretend to be either the seller or a buyer of a new car. They are told that the negotiation involves four categories: the financing of the car, the delivery time, the taxes and the warranty. They’re also told that they should view some of those categories as more important than the others.

But before the participants even begin the mock negotiation, they are asked a series of questions about how they’re viewing the problem – and how much they see each of the four categories as a “win-lose” situation for them.

As Leigh Thompson at Northwestern’s Kellogg School of Management showed, the answers to those questions create remarkably accurate predictions about how efficiently each pair of negotiators will reach an agreement that makes both parties happy. The more competitive a negotiator is about “winning” on every category, the less likely it is that the negotiation will succeed.

Dean Pruitt, a prolific researcher of negotiation and social psychology now at George Mason University’s School for Conflict Analysis and Resolution, says it’s not impossible for negotiators who take a “win-lose” viewpoint to eventually figure out an agreement, but it’s a lot harder. “With the fixed-pie bias, it’s possible to reach an agreement, and a compromise in which neither party bests the other, but there’s usually a real power struggle before you reach that point,” Pruitt says.

Obviously, the ongoing negotiations over the debt ceiling and the government shutdown are far more complex than two people pretending to fight over buying a car. But the research is useful to understanding why the most visible leaders in the negotiation – like President Barack Obama and House Speaker John Boehner – are saying publicly that they won’t make certain concessions.
“When you have groups negotiating against each other as in this case, you can have negotiation at several levels,” Pruitt says. “At the official level, they’re holding firm on each side, and they act as if it’s a fixed pie, because they’re trying to make the other side back down. But then, hopefully, there are conversations going on behind the scenes that are seeking some middle ground, something both sides can agree to.”

There’s a problem there too, though.

Public ultimatums are making resolution of the debt ceiling debate more difficult too, argues Max Bazerman, a professor at Harvard Business School and an expert in negotiation.

“Drawing lines in the sand is generally not a particularly good strategy because it simply creates constraints,” Bazerman says, noting that both sides now have less flexibility for a creative long-term fiscal agreement. “They’ve restricted their ability to craft wise deals.”

But, he adds, the more issues that are added to the negotiations –in search of a so-called “grand bargain” – the better, because more moving parts mean more opportunities for compromise.

“In many cases you don’t want negotiations to be too complex,” Bazerman argues. “But the problem with simplicity in this context is that too many red lines have been drawn for each party to have any basis for success on any simple deal.”

So what if lead negotiators manage to reach some kind of agreement in the Senate? Will the House buy into it too?

Plenty of political observers have said that Boehner is likely to have trouble selling any kind of compromise bill to conservatives in his caucus, so he might reject a deal.

There’s research that explains that phenomenon too, says Gelfand – and it’s one reason that getting a deal has taken so long.

“This is a classic case of coalitional dynamics,” says Gelfand. “The leader – Boehner, in this case – has a lot of accountability to a coalition in the House. And a lot of research shows that if a representative has a lot of accountability, that makes that representative more competitive in negotiations.”

Imagine a study that’s similar to the car negotiation, but with a twist: some of the participants are told that they will have to explain any deal that they reach to a third person who has the power to punish or reward them based on how good the deal is.

That kind of research shows that people tend to be much more reluctant to make concessions and more likely to reject offers if they feel “accountability” to a powerful third party. The tactics that “accountable” negotiators use also tend to be more contentious and include more threats, and – if they reach agreements – it tends to take longer to reach a deal.

Gelfand says those studies back up what plenty of political observers have said about Boehner’s ability to buck his conservative right flank.

“The more distant Boehner could become from these coalitions, to try to separate from them and be relieved from the pressure, the more likely he will be to reach an agreement,” she said.

I admit, I'm really worried at this point. I know too many people who will be immediately, drastically effected if the government defaults and the social security checks don't get sent out in November. At this point, if I had a Republican congressional representative I'd vote for him for as long as he cared to run if he'd show the moral courage and good sense to say "good game guys. It's not going to be today. Let's try and actually run the country for a change."

[Mr Bean]

So what now? Is the situation going to be resolved soon or will things get interesting?

One of three things happen today with two variants on the possible problems

1. The house passes something this morning or afternoon. It goes to the Senate for voting and is approved and signed by the Senate kicking the problem down the road for a month.

Variant 1B, The bill passes as normal today but does not re-open the goverment only pushes the debt limit down the road for a few weeks.

Variant 1C. A senator forces 30 hours of discussion before a vote can be taken, the bill is approved but America officially goes into default for 20 or so hours

2. The house passes something the President or Senate refuses to approve, the nation enters default and Thursday the markets become very unsettle as we start this fight tomorrow with the deadline for default being close of business.
2A. The house passes something it know won't be approved and tries to drop the mic and leave the capital. The market goes nuts.

3. The house passes nothing, or worse puts something up for a vote that is defeated, the market loses its shit.

[Patroklos]

The debt limit deadline has nothing to do with default in thta it doesn't actuallys signal when we run out of money. I have seen wildly varying speculation as to when we actually won't be able to cover a debt service, from one day to the end of the month (when SS and military pay is due).

Apparently the government has 30 billion in cash on hand but given the seemingly random way we collect revenue and pay for things there is really no way to predict when that will run out. But as far as default goes not being able to pay for government services (ie SS payments) does not mean a default, not paying for debt service does. NPR reported this morning that the next large debt service payment is on Monday.

[Borgholio]

2A. The house passes something it know won't be approved and tries to drop the mic and leave the capital.

I can't imagine the GOP doing anything worse than this in regards to their public image. What would the potential backlash be?

[Kuja]

Considering the GOPs approval rating is already in the toilet (along with the rest of the excrement) thanks to the shutdown, I can't imagine trying to smarm their way out in such a way would be anything but disastrous for them.

[NeoGoomba]

According to polls Republicans are already more reviled than Nickleback. If that doesn't give some random coalition of third parties a shot at getting some seats, I don't know what does.

[Patroklos]

A graphic of when the bills are due, from NPR...



I would like to know when the next interest payment is due after 01NOV.

[Simon_Jester]

The debt limit deadline has nothing to do with default in thta it doesn't actuallys signal when we run out of money. I have seen wildly varying speculation as to when we actually won't be able to cover a debt service, from one day to the end of the month (when SS and military pay is due).

Apparently the government has 30 billion in cash on hand but given the seemingly random way we collect revenue and pay for things there is really no way to predict when that will run out. But as far as default goes not being able to pay for government services (ie SS payments) does not mean a default, not paying for debt service does.

It will, however, likely mean a drop in our credit rating;. Even if they don't skip an interest payment, if the government is unable to make a payment of any kind on schedule, it calls into question the reliability of the government's promises to make the debt service payments on schedule.

It is entirely realistic to ask "okay, you no longer have a legal means of paying your next interest payment, your arbitrary self-imposed credit limit is maxed out... Sure, you may find some money under the sofa cushions and scrape up a payment this time. But in the long run, how can we trust you to actually pay us? If you ever do want to borrow more money, you'd damn well pay us a better interest rate to make up for the risk we're taking."

Last time this happened, there was NO default and S&P still downrated our bond rating... because we were bickering about it like idiots and a lot of people, including elected officials, were in denial about it and saying "sure, a default wouldn't be so bad." So S&P reasonably concluded that while we'd been able to pay interest this time, it was no longer a certainty that we'd be able to do it next time, and we got downrated a tick.

So let's not be in denial about this. If the US plays further games with the debt ceiling, flirts with default, or even looks as if it will do those things- arguably it already does- we're going to have to pay higher interest rates and have more trouble borrowing money. It's common sense.

Irresponsible behavior has consequences.

[Napoleon the Clown]

Wall Street Journal

The Senate has reached a deal they can live with in sufficient numbers.

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By
Kristina Peterson and
Janet Hook
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Updated Oct. 16, 2013 1:40 p.m. ET

WASHINGTON—Senate leaders on Wednesday struck an 11th-hour agreement to avoid a U.S. debt crisis and fully reopen the federal government, putting lawmakers on track toward ending a stalemate that worried investors world-wide and provided striking evidence of congressional dysfunction.

House Speaker John Boehner (R., Ohio) has said he would bring whatever deal the Senate crafts to the floor of the House, where Republicans on Tuesday had tried and failed in their own last-minute effort to unify behind a proposal to end the impasse. The Senate deal gives GOP lawmakers almost none of the policy gains they had sought, but enough House Republicans are expected to join with Democrats in order to pass the measure.
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U.S. Senate Majority Leader Harry Reid announces a last-minute deal on the floor of the Senate on Wednesday. Reuters
Follow Live Updates in the Budget Battle

Many officials view Thursday as a landmark event, when the Treasury says it will exhaust its emergency borrowing powers and be left with about $30 billion to pay the nation's bills.
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It was unclear when each chamber would vote, but some lawmakers said the Senate agreement could clear both chambers on Wednesday.

House GOP leaders were contemplating taking up the expected deal from the Senate for a vote later in the day, according to aides from both parties. That would send the bill to the Senate in a fashion enabling the Senate to skip some of its time-consuming procedures to ensure a quicker final vote.

The Senate plan, announced by leaders as the Senate opened its session, would fund federal agencies at current spending levels through Jan. 15 and extend the nation's borrowing authority through Feb. 7. A negotiating committee would separately be charged with devising plans for longer-term fiscal solutions.

"The compromise we reached will provide our economy with the stability it desperately needs," Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor. Senate Republican Leader Mitch McConnell (R., Ky.) also spoke, saying he was confident the deal would end the budget stalemate on Wednesday.

President Barack Obama will accept the deal, White House spokesman Jay Carney said. Mr. Obama believes the agreement "will reopen the government and remove the threat of economic brinksmanship," Mr. Carney said. "The president hopes that both houses will act swiftly on this agreement."

There was palpable relief among Republicans who had been part of a bipartisan effort to break the deadlock. "We're ready to open the government and we are ready to make sure everyone around the world knows the U.S. pays its bills on time," said Sen. Lamar Alexander (R., Tenn.).

Senate leaders from both parties raced to complete work on the deal to fully reopen the government, closed now for 16 days, and act ahead of a landmark moment when the U.S. Treasury says it will exhaust emergency borrowing powers and be left with only about $30 billion to pay the nation's bills, enough to last for a week or two.

If all 100 senators agree, the bill could potentially come to a final vote in the Senate later Wednesday. Sen. Ted Cruz (R., Texas), who has led a charge against the 2010 health-care law that led to the government shutdown, said he would vote against the bill but wouldn't prevent it from coming to a quick vote, a sign the measure could quickly move in the Senate. "There is nothing to be gained from delaying this vote one day or two days,'' said Mr. Cruz.

The deal won't prevent the Treasury Department from using emergency measures to avoid default in the future, a big win for the White House that will have implications the next time Congress debates whether to raise the country's borrowing limit, congressional aides said. House Republicans pressed unsuccessfully to add restrictions in recent days.

The Senate agreement includes no major alterations to the 2010 health-care law. But the deal will include one minor change sought by Republicans, setting new procedures to verify the incomes of some people receiving government subsidies for health-insurance costs. Negotiators rejected a Democratic proposal to delay for one year a fee of $63 per insured person levied on groups that offer health policies, including employers, labor unions and insurance carriers—a fee opposed by many large employers and unions.

The Senate deal doesn't include a provision granting federal agencies more flexibility to mitigate the effects of the across-the-board reductions known as the sequester. Congressional aides said the next round of cuts kick in when the stopgap spending measure ends in mid-January, motivating lawmakers to reach an agreement to ease the burden of the sequester's blunt cuts by then. The next round of reductions will bring annual spending levels down to $967 billion from $986 billion, largely through cuts to defense spending.

The setback in the House on Tuesday was the result of pressure from conservatives, who objected both to the Senate bill and Mr. Boehner's alternative because they gave Republicans too little of what they had been demanding. Conservatives have been pressing for major changes in the 2010 health-care law and additional measures to reduce the deficit.

GOP leaders had tried to build backing by including proposals sought by conservatives, including one that would have cut government health-insurance benefits for congressional and administration officials, including their staff, under the 2010 health-care law. But the bill met powerful headwinds when the conservative political group Heritage Action on Tuesday evening announced its opposition and said votes on the measure would be included in the group's influential ratings of lawmakers.

Sen. Kelly Ayotte (R., N.H.), a centrist who engaged in the Senate's bipartisan Senate talks, bridled at suggestions conservatives were prepared to re-fight the anti-Obamacare battle when the next budget deadline comes.

"They have learned nothing," Ms. Ayotte said. "If we learn nothing else, I hope we learn we shouldn't get behind a strategy that has no endgame."

—Siobhan Hughes contributed to this article.

At least the Senate is composed of adults.

[Dartzap]

Does that mean it's effectively over then? Or is the Other Place likely to to decide to piss it all away?

[Napoleon the Clown]

It's probably over, since Boehner's agreed to put anything the Senate offers on the floor. We confirmed over 20 House Republicans would sign basically anything they were offered already, and I'm sure that most of them will be willing to agree to what's being offered so as to not piss off their corporate overlords. Voting no on this would be tantamount to saying "I am willing to crash the economy over my petty grievances with a single law." No corporation will want to back someone who's willing to default on the national debt, they're too risky.

Which means Ted Cruz probably is losing his campaign funding, thanks to his vow to vote no on it.

[Mr Bean]

It's not over until it's on the Presidents desk. There are still a dozen ways the House or Senate could kill it via congressional shenanigans or just delay it. In the Senate all it takes is one.

[Kuja]

While true, I think Napoleon's right. The corporates and the bigwigs thought that by giving the tea party airtime they could fill enough seats in congress to ensure a win-lose situation for themselves and their tax brackets. Instead the hard right proved crazy enough that the shutdown showed things aren't win-lose, but rather lose some or lose BIG.