Streams

Government Shutdown Day 10

Thursday, October 10, 2013

(Ron Cogswell/flickr)

Peter Coy, economics editor for Bloomberg Businessweek, discusses the latest on negotiations to temporarily fund the government and avoid default, Janet Yellen's nomination for chair of the Federal Reserve, and how the shutdown is affecting government services for veterans and programs like Head Start. 

Guests:

Peter Coy
News, weather, Radiolab, Brian Lehrer and more.
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Comments [57]

@RUCB_Alum, it is the drawing of money from the Treasury that is required to be a consequence of Appropriations made by law. The "appropriations made by law" are those stipulated in an appropriations bill which has been passed.

Allow me to parse/translate it for you:

"No Money shall be drawn from the Treasury" -- Money cannot be spent
"but" -- unless
"in Consequence of" -- it has been authorized by
"Appropriations made by Law" -- an appropriations law

Oct. 16 2013 06:51 PM

@cpklapper

No, I don't understand. Does anyone get CPK's point?

"No, @RUCB_Alum, Obamacare is not an appropriation bill...". I never claimed that it was. My contention is that expenses related to implementing it are a "...Consequence of Appropriation made by law..." and the House attempting to 'defund' what they cannot repeal is unconstitutional.

Oct. 10 2013 05:01 PM

@Brenda from Manhattan

"...why is President Obama on track to add more debt to the nation than all the Presidents in history - combined?"

Your are mistaken. At the current rate, national debt under Obama will go from $11.5T (where Bush left it) to approx. $19.5T. Obama would have $3.5T left to spend in order to achieve the record you claim.

Congress could cut the budget (hurts many folks, most of those already at or near the bottom) OR they could stimulate jobs and education - +2M jobs (even temp ones) closes the budget gap PDQ. Less pain for everyone but again the GOP/TP get no drumbeat of austerity to pound.

Oct. 10 2013 04:52 PM
amalgam from NYC by day, NJ by night

@ Brenda from Manhattan -

I agree with you and RUCB that the system is broken, but while it's true that current spending trends - especially for Medicare - are unsustainable given the Baby Boomer retirement bulge, although your tremendous emphasis on it seems overwrought. In the current global economic system, all well-functioning national governments operate using debt even if they have money to pay in full. That's because they need to be liquid, have access to cash for budgetary reasons, and to offer governmental debt in the form of bonds for things like infrastructure projects.

We can debate just how unsustainable the debt is, but the US federal debt is not a household budget, nor is it Detroit, Greece or the China, but rather the holder and administrator of the reserve currency on which the global economy depends.

Further, on the increase of deficits under Obama, by far the biggest reason for the large increase is what he encountered: The greatest recession since the Great Depression.

What were the primary reasons for increased deficits?

http://www.businessinsider.com/us-budget-deficit-2011-7

1. (By far the biggest) Lower federal (and state and local) tax receipts due to job and income loss;
2. Spending on the Stimulus, which while not a panacea, helped to save the economy.

Odd that so many poeople forget history, and recent history, at that. Wonder why?

Oct. 10 2013 03:40 PM
NC from NYC

Correction: Janet Yellen went to college at Brown (my alma mater); She got her PhD from Yale.

Oct. 10 2013 02:00 PM
dlm

Nice that Brian actually reports the talking points the WH is issuing - "we should say the White House is talking not negotiating". Listen to ABC/NBC/CNN and hear how closely they follow the WH instructions.

Oct. 10 2013 12:48 PM
Brenda from Manhattan

RUCB_Alum - I'm not sure why you got on the left right blame game. That seems to be the knee jerk reaction everyone jumps to. If we go by that logic, why is President Obama on track to add more debt to the nation than all the Presidents in history - combined? And then why does the Federal Reserve have its largest balance sheet of bad debts in history, and why have we printed more money than ever before? Anyway, that is not my point. We need to wrap our heads around the enormity of the problem so that we can try to manage it.

By the way, we were never on track to pay back the debt. That was all magical projections. During the best times of the 90's we still were adding to the national debt - just at a slower rate, and again by ignoring the elephants in the room (unfunded promises).

Oct. 10 2013 12:42 PM
dlm

Big business loves regulation. They lobby hard to get the regulations in place they want and that help keep competition down. It is small business that falls under the regulation burden. Please stop with the meme that business is in bed with Republicans. Wall Street & Hollywood are both 90% Democrat and as big as business can get. Would be willing to bet my life savings that the majority of Bloomberg news reporters vote democrat.So please stop with the phony meme. Today Democrats predominately represent the very rich and the welfare class. While the middle class is left to the Republicans.

Oct. 10 2013 12:28 PM

BTW, I wrote down my own analysis of the the stalemate in a letter to the Washington Post, which they do not appear to have published. I posted it on Facebook today, after a week of waiting. I call it "The Demise of the Budget".

https://www.facebook.com/notes/c-p-klapper/the-demise-of-the-budget/10151683522361569

Oct. 10 2013 12:26 PM

No, @RUCB_Alum, Obamacare is not an appropriation bill. Appropriation bills are the "money" bills which Congress passes when it agrees to fund specific activities under "non-money" bills. If an appropriation law is passed for a particular activity, then money being drawn from the Treasury is a consequence of that appropriation (made by) law. Conversely, if an appropriation for a particular activity is not passed, then any money drawn from the Treasury for that activity would NOT be a consequence of an appropriation made by law, ergo a violation of the Constitution. Congress is not required to pass any of the appropriation bills which may be proposed; the executive branch, on the other hand, is required to wait for an appropriation bill for an activity before spending money on that activity. If this is never done, then no money can be spent on the activities without an appropriation.

Do you understand now?

Oct. 10 2013 12:18 PM

@Brenda from Manhattan

"The system is broken..."

We can agree on that. I'd say that taxes are not progressive enough and that incomes are too concentrated in too few pockets. The fact that the national debt is bigger than the GDP is sobering but not frightening. You would think that would make the GOP get the JOBS pump going so that the deficits were reduced. But if they did that, they wouldn't have an austerity refrain for their song of budgeting.

If the GOP had ever been serious about the deficit why did they permit Reagain to trip it ($1t to $3T) or Bush to double it? $5T to $11.5T) In fact, the country was on track to PAY OFF THE DEBT ENTIRELY IN TEN YEARS...so the BushII/GOP record is $16T swing.

From my point of view, the GOP is NOT serious about the deficit OR the national debt. Their reputation as the fiscally responsible party is wholely unearned.

Oct. 10 2013 12:02 PM
Brenda from Manhattan

RUCB_Alum - you are simply wrong and did not carefully read my statement. As it stands the national debt (funded expenditures) is the size of the entire GDP. Unfunded is many times that. Ongoing income from that group, can NOT pay in the long term for unfunded liabilities - at the national level along - forget about States and local governments which almost all have long term problems) it will only delay the inevitable - but if enacted that theory we would tank the economy anyway, so again there is no panacea there.

The system is broken, but it is easier for everyone involved to bury one's head I guess.

Oct. 10 2013 11:39 AM

@cpklapper

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

Hmmm...Is ObamaCare a Consequence of Appropriate made by law..." Unquestionably. So where is the part that says that Congress can withhold funding of Appropriations made by law?

I think you've made the point that Congress is usurping power not accorded to it in the Constitution.

Oct. 10 2013 11:39 AM

@Brenda from Manhattan

Your analogy is broken. Collecting personal fortunes will not pay all of our future liabilities, taxing future income streams appropriately will.

I am no authority just a good listener with a firm grasp of the basics of economics and a fair knowledge of American history. Lots of grounding in logic from many years as a computer programmer.

Oct. 10 2013 11:33 AM

Article I, Section 9, Clause 7 reads:
"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

Since Congress makes the laws, it controls the expenditures, i.e. it controls the purse strings. More explicitly, the appropriations laws determines what gets spent on plain, old legislation. As the negative phrasing makes clear, this is a veto power and Congress is "doing its job" primarily in restricting the extent to which money is "drawn from the Treasury" and not, as the Democrats would have it, in rubber-stamp "paying of the bills".

Oct. 10 2013 11:32 AM
Brenda from Manhattan

RUCB_Alum - if you took the time to look at the numbers, we could just literally confiscate all billionaires (and even $500k dollar income earners) entire fortunes plus all ongoing income and it could not pay our unfunded liabilities - at the national level, let alone at the state and local levels. I'm sorry, you seem to come in as some authority every day, but you are very, very wrong here.

We have dug ourselves into a rather large hole. If our creditors decide they have had enough we will again have a major financial problem. Foreign creditors not dumb and are no longer even the major buyers of our debt, the Federal reserve is, printing money to purchase our debt. This is not sustainable.

Oct. 10 2013 11:23 AM

@Joyce from NYC, et al

"Congress controls the purse strings."

Let's put this one to rest, please. What part of The Constitution says that Congress controls the purse strings? Show me the section that authorizes Congressional usurpation of our system of government?

Article 1 Section 7 states: All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

Seems to me like the last thing the current GOP-led Congress wants to do is their Constitutionally defined function. Raise revenue. Instead, they have taken us all hostage. These guys ought to be in jail.

Oct. 10 2013 11:13 AM
Amy from Manhattan

Joyce from NYC, "Obamacare" was passed by both houses of Congress. Hardly dictatorial.

Kumru from Brooklyn, I'm glad to tell you you did mishear. Brian did cite Sartre, & specifically "No Exit," for "Hell is other people"; he said he wouldn't look for a parallel to Camus. At least that's what I heard.

Oct. 10 2013 11:11 AM
Joanne Wiesner-Steiner from New Rochelle, NY

How about a farce? A Funny Thing Happened to Me on the way to the Shutdown? Or, the Wonderful Wizard of Odd. Michelle Bachman as Dorothy Gale, John Boehner as the Steadfast Tan Woodsman, Ted Cruz as the Cowardly Lion. Paul Ryan as the Straw Man. I don't know who the Wizard is, but Nancy Pelosi can be Glinda the Good Witch. "You had the power to reopen the government all along. Just close your eyes, click your ruby slippers together 3 times, and say, 'I will vote for a Clean CR, I will vote for a Clean CR, I will vote for a Clean CR." Then JUST DO IT!

Oct. 10 2013 11:06 AM

@Brenda from Manhattan

"If we are facing this problem right now without increasing our "credit card", what is going to happen as more boomers retire? 17Trillion - > ???. When will the carousel stop?"

The government clearly needs more revenue. Raise the FICA caps, raise average incomes (you would not believe the difference it makes to tax revenues of $1T spent among 10,000 workers versus a handful of already billionaires).

@Robert from NYC and Martin C

You were yawning an hour before the show started...What were you listening to? Theater of the mind?

Oct. 10 2013 10:43 AM
Dee from Bronx

Essential federal emplyees can (and some already have) be furloughed
And ordered to work without being paid. I guess that makes the Congress
Non-essential.

Oct. 10 2013 10:42 AM

@Joyce

"What government shut down????

Obama has assumed dictatorial powers – he changes the law at will – see Obama care, and keeps open those parts of the government he wants."

Wow! Do you have it bass-ackwards. Probably too much FoxNews in your diet. Fortunately, the Gallup polling shows that the American people have it right. The GOP approval rating is at it's lowest ever! (28%) and Boehner is at 5%.

I, frankly, am tired of the bemused attitude taken by the media here. What we are dealing with is an insurrection where a minority have ended government services for MILLIONS in exchange for the President to shutdown/delay/retard the approved effort to cover 15% of US with health insurance. Blow off all of the icing and tales of doom and that is *all* they are trying to change. The ability of 45 million Americans to *buy* health insurance.

The GOP has no credibility on the national debt or spending control. Reagan ran up the debt 300%. Bush II doubled the debt from $5t to $11.5T - that trillion and a half deficit year (2009) belongs to Bush NOT Obama.

Imagine for 1 full minute the amount of news coverage and bile spewing on Fox that would have ensued had the Democrats attempt to use the same tactic to get the troops out of Iraq! It would be seen for the extra-constitutional power grab that it is.

Strange behavior from a group of folks who spend so much time harkening back to the founding fathers.
Tea Party hyprocrisy

Oct. 10 2013 10:36 AM
Steve from NYC

Regarding the 27th Amendment. It was one of the 12 original amendments proposed to the Constitution. The 10 that were ratified are the Bill of Rights. It took almost two centuries for the what became the 27th Amendment to join them.
The amendment's main intention was to prevent members of Congress from raising their own pay but perhaps at least some of the writers of the Constitution foresaw a time when people would be angry at Congress and demand the compensation for its members to be reduced.

Oct. 10 2013 10:34 AM
Syd from UWS

HA!!! Edward from Washington Heights AKA pretentious Hudson Heights -- Yes, Mr. Pelosi could save us all! hahaha. But seriously....

Oct. 10 2013 10:33 AM
Seth

"Most people live long enough to draw out of social security a lot more than they put in."
... and a lot of people die before they turn 60. what's your point?

Oct. 10 2013 10:32 AM

Poor Mr. Coy, he doesn't know the simplest ways to help Social Security which is not a budget item, anyway:

1) remove the salary/wage cap on all FICA/FISA taxes;
2) make all same year earned income, including partnership "carried interest" subject to FICA/FISA taxes.
3) for other taxes, limit capital gains to assets held over 10 years minimum & make it only a 5% discount on the taxpayer's regular tax rate.
4) allow Medicare/Medicaid to negotiate directly for all goods/services including Part D Rx drugs, medical devices
5) since SNAP has been split from farm subsidies, double the benefits & make them subject to primary care physician input to guarantee proper patient nutrition, approprate vitamin/mineral supplements to help cope with organ damage due to chronic Rx medications, other care - preventive/restorative treatments to prevent future patient deterioration.

Mr. Coy is just too steeped in DC "bubble talk." Like many MSM reporters, he's dumber than the people affected by the DC policy stalemate.

Oct. 10 2013 10:31 AM
Robert

Brian,

Social security is separate from and doesn't contribute to the federal budget deficit. It also is doing fine for the short term and could be helped massively by an elimination on the cap on income subject to the SS withholding.

You let your guest get away with "taxes must be raised A LOT" to "fix" SS and Medicare.

As per above that's not true for SS and though I don't have any numbers I suspect -- given your guest's misstatement on the first -- it's not true for the latter.

Your show is enjoyable but I keep having to swear off it when I start hearing nonsense endorsed as fact. And please stop with the grand bargain obsession -- I really expect more from WNYC than I would from cable news

Oct. 10 2013 10:31 AM
katya

This is very reminiscent of Ionesco's The Bald Soprano, people screaming at each other with non sequitors

Oct. 10 2013 10:30 AM
Citizen from America

Joyce, "jack booted thugs?" Definition please, it is not in google search.

Oct. 10 2013 10:30 AM
Edward from Washington Heights AKA pretentious Hudson Heights

Syd from UWS

You left out Mr. Pelosi.

Oct. 10 2013 10:28 AM
Coogan from NYC

The wives going on 'sexual relations' strike to get their politico hubbies back to the negotiation table might work, assuming that was a factor worth saving to begin with.

And just to note, as fact: Ted Cruz's wife is Heidi Suzanne (Nelson) Cruz. a VP of Goldman Sacks Private Wealth Management. I'm sure they'll find a way to profit off any partial shutdown or not.

And given her position will get the first word when it will happen, thus able to profit off it. Food for thought!

Oct. 10 2013 10:27 AM

Antifederalists don't need facts or science they need only "faith"
But now they've gone too far, even the Kochs are souring.

Oct. 10 2013 10:25 AM
Sara from Bushwick

Congressional pay should be pegged to their approval rating.

Oct. 10 2013 10:24 AM
jgarbuz from Queens

Anything you assume the government OWES you, is an entitlement. Of course, social security was supposed to be a pension fund into which you allegedly contributed into, but in fact it is a tax. Most people live long enough to draw out of social security a lot more than they put in.

Oct. 10 2013 10:24 AM
Terri from Brooklyn

Please please please STOP using the boiled frog metaphor. As James Fallows has repeatedly pointed out, the frog will, in fact, leap out when the water gets too hot.

Oct. 10 2013 10:23 AM
Amy from Manhattan

I've gotten emails from 2 environmental organizations saying that while visitors are being kept out of national parks & wilderness areas, logging, mining, & drilling co's. still have access to them, & the park officials who enforce the environmental laws in those places aren't there to make sure they obey those laws.

Oct. 10 2013 10:22 AM
Seth Peckstiff

Joe - no one here pays any attention to Martin anymore. I mean, talk about yawn.

Joyce - if we're going to still debate who shut down what, then shame on us. it's both sides, but then what do you do?

Oct. 10 2013 10:22 AM
Syd from UWS

Don't you love how Brian Lehrer asked Mrs. Cruz and Mrs. Boehner to urge their husbands to compromise but NOT Mrs. Obama, Mrs. Reid, etc. etc. This is exactly the problem. I expect more of Brian Lehrer.

Oct. 10 2013 10:21 AM
Brian from Manhattan

If I got this right, the gov't i snow shut down and (some) Federal emplyees stay home. In the process, the American people are inconvenienced, but no money is really saved. Futhermore, it is likely that all back pay will be paid and we'll likely have to pay overtime or other costs to take care of the backlog/issued caused by the shutdown.

As I see it, then the end, the shutdown will cost more than if we just kept going.

That is calssic Republican thinking, shut down the gov't to make a point about overspending and in the process spend even more money.

Oct. 10 2013 10:21 AM
Brian from Manhattan

If I got this right, the gov't i snow shut down and (some) Federal emplyees stay home. In the process, the American people are inconvenienced, but no money is really saved. Futhermore, it is likely that all back pay will be paid and we'll likely have to pay overtime or other costs to take care of the backlog/issued caused by the shutdown.

As I see it, then the end, the shutdown will cost more than if we just kept going.

That is calssic Republican thinking, shut down the gov't to make a point about overspending and in the process spend even more money.

Oct. 10 2013 10:21 AM
Dee from Montclair

I want to know why journalists continue to give these extortionists equal time. They lead with Boehner because he gives good soundbites. We are give nuts like Ted Cruz free advertising.

Oct. 10 2013 10:18 AM
Joyce from NYC

Citizen from America writes:
<<Joyce, are you insane? You do realize that the government was shut down by congress yes?>>

Congress controls the purse strings. The executive branch administers. If Obama has access to money for his jack-booted thugs to keep people away from memorials on the Mall in DC, he can use the same jack-booted thugs to taken down the barbed wire and let citizens in.

Oct. 10 2013 10:16 AM
The Truth from Becky

The AFFORDABLE CARE ACT, is not the issue here. There are no more negotiations needed on that law. No compromise, move on tea baggers!

Oct. 10 2013 10:15 AM
Tyrone from Bronx

Is it constitutional legal for a President to carve out exemptions from a law without oversight from congress or the courts? If that stands what will happen when the other party takes over at some point?

Oct. 10 2013 10:14 AM
The Truth from Becky

They would rather "yawn" than face the truth and address the real culprits!

Oct. 10 2013 10:13 AM
tom from astoria

Is the a SUCCESS in this shutdown that the GOP hardliners are causing all kinds of problems durning Obama;s time in office? Like an NFL team resorting to all kinds of unattractive uninspiring play designed TO RUN OUT THE CLOCK, they can pat themselves on the back someday and boast about all the delay and mayhem during that socialist's team in office.

Oct. 10 2013 10:12 AM
Citizen from America

Joyce, are you insane? You do realize that the government was shut down by congress yes?

Oct. 10 2013 10:11 AM
Joe from New York

Martin Chuzzlewit from Manhattan: Sorry you (mis)interpret the show that way. I suppose that compared to Fox News, anything else seems like "shameless pro-Obama posturing," even "Dancing with the Stars." Fortunately for you, your radio has an "off" switch.

Oct. 10 2013 10:09 AM
Carolita from Nyc

Isn't it more "bonfire of the vanities"?

Oct. 10 2013 10:08 AM
Kumru from brooklyn

Have I misheard? I hope I did
"Hell is other people" is NOT Camus, it is Jean Paul Sartre's NO EXIT..

Oct. 10 2013 10:08 AM
Amy from Manhattan

The dialog's better in "Waiting for Godot."

Oct. 10 2013 10:07 AM
Joyce from NYC

What government shut down????

Obama has assumed dictatorial powers – he changes the law at will – see Obama care, and keeps open those parts of the government he wants.

The only things closed are those designed to HURT CERTAIN GROUPS.

This attack by the executive branch on its own citizens is disgusting.

Oct. 10 2013 10:07 AM
Brenda from Manhattan

If we are facing this problem right now without increasing our "credit card", what is going to happen as more boomers retire? 17Trillion - > ???. When will the carousel stop? This is pretty scary. How do we prepare? - a breakdown will happen at some point. It is simple mathematics. There is no tooth fairy.

Oct. 10 2013 10:07 AM
Martin Chuzzlewit from Manhattan

YIKES ... stop this omphaloskepsis (navel-gazing) and do some stories about the rest of the world’s view of the U.S. today under Obama?

Obama's Irresponsible Afghan War - Irish Times
Obama Just Made a Terrible Mistake on Egypt - Eric Trager, New Republic
The Incredible Shrinking Country Called America - Thomas Mucha, GLOBAL POST
Advantage: Iran - Aaron David Miller & Mitchel Hochberg, Foreign Policy

(http://www.irishtimes.com/news/world/asia-pacific/a-dreadful-war-1.1555323)
(http://www.newrepublic.com/article/115115/obama-cuts-egypt-aid-why-hell-regret-it)
(http://www.realclearworld.com/articles/2013/10/09/the_incredible_shrinking_country_called_america.html)
(http://www.foreignpolicy.com/articles/2013/10/08/advantage_iran_nuclear_negotiations)

Oct. 10 2013 10:03 AM
Oscar from NY

Racist communist , their vain discourse shows how racist groups are when they get together, I may not like president Obama because of my own reasons but he's still the president who the majority of Americans voted for he's the authority of the land, anyways if the government would focus on money indiscriminatory than freaking instead of laying ppl out of work, make work make a real job stimulus , TAXES , there are millions of dollars not beign collected, please lord make this ppl understand that they're are so many ppl looking for work why not pay them cheap to sit answer phones crunch numbers etc..why is it that I have to wait 1 hour to talk to a tax representative who does not understand laymans terms?.. I talk to my phone company with a better understanding and help..if it's about the taxes ..fix that, use your think thank.. Every person in the us should have a costumer ready personnel ready to answer my tax questions... Jeezzzzzz!!!

Oct. 10 2013 09:57 AM
Martin Chuzzlewit from Manhattan

Double yyyaaawwwwnnnnnnnn.

More embarrassing, shameless pro-Obama posturing by the Brian Lehrer Show.

Oct. 10 2013 09:29 AM
Robert from NYC

YAWWWWWWWWWWWN!

Oct. 10 2013 09:08 AM

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