Politics : No Real Winners In Government Shutdown

After a long sixteen day stalemate that brought the world’s largest economic entity within minutes of the deadline for a potential default, the House of Representatives passed the Senate’s adjusted continuing resolution budget as US citizens and world economists let out an enormous sigh of relief.

Non-essential federal government workers are now back to businesses as usual, awaiting two weeks-worth of retroactive pay checks and stock prices shot up in value across the board. But looking back on the last sixteen days of shock therapy, did it really do anything?

First of all, Congress still has not actually passed a full year fiscal budget (as they are expected to do annually) but rather a continuing resolution that extends the debt ceiling to $17 trillion through February 5, 2014, thus funding federal expenses until January 15. During the time it took for them to reach this deal with a partially closed federal government, an estimated $24 billion was lost from the economy.

In the end, Senate Democrats certainly succeeded in squandering the Republicans’ attempt at defunding and delaying the Affordable Care Act, although nobody was a clear winner in this standoff. One thing Republicans were able to accomplish was implementing stricter regulations into the A.C.A. to prevent fraud, waste, and abuse of the new system and, of course, cut spending on it.

The only real winners in this catastrophe were people who invested in U.S. Treasury bonds during the shutdown. On October 10, one-month maturity rates peaked at 0.68% but sharply dropped back to their normal range at 0.059% once the budget deal was struck.

With the next budget deadline kicked three months down the road, debates about the Affordable Care Act will certainly continue now that millions of citizens are attempting to enroll for January. Points of interest will revolve around the medical device tax, medicare cuts, and doctor shortages. Republicans are sure to continue to pick it apart while Democrats scramble to hold it together.

On a brighter note, the federal deficit has been nearly cut in half since 2010, but the fiscal cliff won’t be disappearing anytime soon, so more spending cuts, tax hikes, and debt ceiling increases can be expected in the rest of this Congress’s term.