There may be two looming "U.S. government dysfunction" stories coming this month.
The first one is the partial government shutdown. Unless some fix appears within hours, and it seems more likely than not now that no fix is coming, the U.S. government will have to tell about 1/3 of its 2 million public employees – the non-essential personnel – to relax for a little while. The G.O.P. that dominates in the House was trying to use the opportunity to delay the Obamacare health law. However, the shutdown was found more acceptable to Obama and the Democrat-controlled Senate.
This would not be the first such shutdown but the most recent one occurred in 1996, during Clinton's reign. The battles that led to that shutdown were similar: health expenses played a role. The whole Congress had been controlled by the G.O.P. at that time.
It seems that the shutdown that took almost a month in total during that one-year period was actually quite a healthy thing. It forced the Clinton administration to balance the budget and the shutdown may therefore be partially credited for the record budget surpluses at the end of the 20th century, too.
Note that only 700,000 people or so would be temporarily fired. It's just 0.2% of the U.S. population or so. The word "government" sounds impressive but it's sort of illuminating to realize how small a group of people – and how small an amount of activities done by these folks – is being paid from those 20% or so of the people's incomes that are stolen from the people's pockets in the form of taxes for the government.
The government is still very far from being the "bulk" of the economy, thank God. At least in the U.S.
Later in October, there may be a much more dramatic and unprecedented (but less likely) event which is an independent one, the collision with the debt ceiling. The need to raise the debt ceiling is a regular event in America's internal political battles and this blog has discussed it repeatedly, too. Some people say that the default is more likely now than it was 2 years ago; other pundits say exactly the opposite.
I tend to think that the default is more likely now than it was before. The debt is really huge and a further increase of it seems more pathological than before. The debt ceiling divided by the GDP has visibly increased, too – close to the Greek proportions, so to say. Moreover, people don't seem to be panicking this time – an indication that many people may have prepared themselves for the shock.
The blame game for these possible events has already begun. Clearly, one needs some compromise between both parties (and groups inside the parties; the G.O.P. seems particularly fragmented in this situation). Each party may say that the shutdown or even default would be the other party's fault.
This blame game may look rather symmetric but I would still say it's much more sensible to claim that a smooth functioning of the government is primarily the government's job – and the government is controlled by Obama and the Democrats. So it's primarily their duty to guarantee that they have the required political support and tools to avoid bad events – and at least the default would be a bad one, for sure. Another question is whether the generic U.S. voter shares my evaluation – she possibly doesn't and she is more important for the fate of the future elections than your humble correspondent.
The Obamacare is undoubtedly a highly controversial bill – one that is rather likely to be reverted as soon as the Democrats will lose most of the branches of the government. It's a matter of their basic political intelligence and responsibility to realize that it's controversial and they don't really have the sufficient support or power to make it happen while avoiding many other risks. If there is a disagreement and some compromise is needed for the elementary functions of the government to continue, it should be clear that the default scenario should be one without a new monstrous social-engineered bill on the health care or anything else.
It seems rather plausible that the Democrats will agree and delay the Obamacare by one year, as demanded by the Republicans. This may actually make the Obamacare more acceptable and well-behaved because as some experts, even in the Democratic Party, admit, the infrastructure isn't ready for the new system of the healthcare. To admit that things are not ready and postpone the Obamacare could be too humiliating for the Democrats but if the postponing is done by the G.O.P., it could turn out to be a profitable coincidence for the Democrat Party.
The Republican politicians are surely thinking about these subtle consequences of their decisions, too.