Good morning! As many observers predicted, the government shutdown crisis has now morphed into the will-Congress-raise-the-debt-ceiling-in-time-to-avert-a-global-financial-panic crisis. Although there are some glimmers of movement, it’s less clear in what direction. If the presumption is that both stalemates will be settled together, however, that means furloughed feds will likely remain out of work through at least part of next week.
The Washington Post, for example, reports today that key congressional Republicans are showing willingness to back down from their insistence on delaying or defunding implementation of the Affordable Care Act (aka Obamacare) as the price of reopening shuttered agencies.
But with the government expecting to be unable to pay all its bills as early as next Thursday, the administration is now focused on getting GOP lawmakers to take the threat seriously, according to The Hill. Some GOP lawmakers have questioned whether a debt default would really lead to a cataclysm; at a Senate Finance Committee hearing this morning, Treasury Secretary Jack Lew blasted those arguments as “irresponsible and reckless,” according to prepared testimony released in advance.
One option would be a short-term agreement to raise the debt ceiling in return for talks over broader changes to the tax code and federal benefit programs. That could include asking federal employees to contribute more to their retirement, House Budget Committee Chairman Paul Ryan, R-Wis., wrote in an opinion piece published in yesterday’s Wall Street Journal (online a day earlier).
Another possibility (not mentioned in Ryan’s piece, but backed by both the White House and many Republicans) would be switching to the “chained consumer price index” as the inflation gauge for calculating cost-of-living adjustments (COLAs) to federal pensions, veterans benefits and Social Security payments. There’s thus far no evidence that the administration is willing to put that on the table as part of a bipartisan budget deal, but just in case, federal employee organizations and other groups held a preemptive news conference yesterday to denounce the idea.
In other news, the Defense Department announced that it’s effectively outsourcing the payment of death gratuities to survivors of fallen service members to a private foundation. In a statement accompanying the announcement, Defense Secretary Chuck Hagel said he was “offended, outraged and embarrassed” that the government couldn’t keep making these payments on its own. But even after passage of the Pay Our Military Act, Hagel said, “we found that we lacked the necessary authority to make these payments to the families directly.”
Any major developments we’ve missed, particularly in regard to agency news? Let us know with an email to email@example.com.