The political theater reached a frenzy just before lawmakers dodged a crisis and kept the U.S. government open for business.
The timing was brilliant
The dramatic right-versus-left showdown allowed lawmakers to save face and look tough while ultimately avoiding a shut-down. Some are saying both Democrats and Republicans won and can’t be blamed in the next election cycle for bringing things to a grinding halt.
The economy was likely a key factor in averting a shutdown
The fragile, recovering economy would likely have suffered in the wake of a shutdown. How would the markets have reacted Monday if there had been an impasse? And how would the so-so jobs picture have fared? When parks and places, like the National Mall or the Grand Canyon, close, so do the small businesses that rely on their foot traffic. Not only would 800,000 federal employees be furloughed, but plenty of private sector jobs would be too.
Congress has one more week to finalize the details, with a vote expected on Thursday
Here are a few key points from the Friday compromise:
1. Planned Parenthood and Title X (which we wrote about last week) are safe for now but part of the deal requires the Senate to vote on defunding both next week.
2. The Senate will also vote on if to defund health care reform.
3. The overall budget only lasts for six more months--September 30 marks the end of the 2011 fiscal year, so get ready for 2012 budget jockeying to begin soon.
4. The deal cuts $39 billion (which Obama calls the largest cut in history) from the budget, making the final budget $79 billion shy of what Obama had originally proposed. All of these reductions come against the backdrop of anexpected $1.6 trillion budget deficit this year.
For more details on the deal see this report and this one, and for a good look at what’s next, read this.
Truth behind the fiction
Image from www.whitehouse.gov