Federal government reopens and default risk averted for now; Changes ahead for Morro Bay residents in need.

Obama and Boehner image from The Telegraph

This morning, the United States government is open for business once again, with thousands of federal employees receiving e-mails telling them to return to work, being sure to “check on any refrigerators and throw out any perished food”. Shortly after midnight this morning, President Obama signed a bill that will reopen the government and stave off the risk of a U.S. default on our debts, at least until early next year. Meanwhile, Morro Bay residents in need will soon find local programs to help them may have moved to a new day and possibly a new location.

Divided Congress Agrees to Shutdown/Debt Ceiling Deal

The shutdown crisis began last month, when Republicans in the House of Representatives proposed budget bills that would have either removed federal funding from health insurance programs created by the Affordable Care Act, better known as “Obamacare”, or delay the implementation of those programs. President Obama and Congressional Democrats refused to accept any changes to Obamacare. Since Democrats control the Senate but Republicans control the House, Congress was unable to agree on a budget, triggering the closure of all “non-essential” government offices and programs. About 800,000 federal employees were furloughed – told to take time off of work without pay.

Meanwhile, the clock ticked down to October 17, the day the federal government would reach its “debt ceiling” and be unable to borrow any more money to pay its bills. This would have meant that those people to whom the U.S. government owes money would not get paid, defaulting on our national debt. The United States has not defaulted since 1790, and therefore the world economy depends on U.S. government bonds being a “risk-free” investment in order to calculate the expected rate of return on risky investments. Economists agree that a default by the U.S. government would have a very large, very negative impact on the world economy.

Both parties agreed to pass a new bill that would simultaneously re-open the government and prevent a default, but many Republicans, particularly those affiliated with the Tea Party movement, continued to insist that such a bill also include provisions gutting parts of Obamacare or be linked to big budget cuts, while Democrats were just as insistent that only a “clean” bill with no such provisions should pass.

As it happened, the deal that was reached put off the enforcement of the debt ceiling until Feb. 7 of next year, and will fund the federal government through Jan. 15. In return, it sets up a bipartisan committee to hash out a more permanent budget fix, and sets up tighter monitoring on the eligibility of Obamacare applications to reduce the risk of fraud. It also pays furloughed federal employees for their time off, authorizes relief aid for areas in Colorado hit by recent floods, and will help to fund upgrades on a dam and locks on rivers in Kentucky.

The bill passed the Senate 81-18, with notable “no” votes coming from Sens. Marco Rubio (R-Fla.), Rand Paul (R-Ky.), and Ted Cruz (R-Tex.). In the House, it passed 285-144, with all House Democrats and a minority of House Republicans approving the deal. Some conservative commentators likened the vote to a “surrender” by non-Tea-Party Republicans in Congress. Liberal voices throughout the crisis blamed Republicans for the debacle. An ABC News/Washington Post poll shows that 74% of Americans disapprove of Republicans’ handling of the crisis, 61% disapproved of Democrats’ response, and 53% disapproved of President Obama’s actions.

Of the deal, Speaker of the House John Boehner (R-Ohio) said “We fought the good fight, we just didn’t win.” The President declared “There are no winners” in this deal, stating “Nothing has done more to undermine our economy the last three years than the kind of tactics that create these kinds of manufactured crises… The American people are completely fed up with Washington.”

As of press time, national parks had been re-opened and various government websites had updated for the first time in weeks.

Local Food Bank Distributor in Morro Bay may be Moving

You may remember my blog post a few weeks ago about a local program where donors and volunteers provide food for Morro Bay residents in need at the Veteran’s Memorial Building. That program is about to face some really big changes – but the Food Bank Coalition insists that help for poor families will continue and even improve.

As it currently stands, the Morro Bay Seniors runs a food bank distribution in Morro Bay every Monday, Tuesday, and Thursday and a separate USDA-run food distribution every third Friday of the month. These deliveries provide nutritious food for Central Coast locals that may otherwise go hungry. The food is donated by local stores, farmers, agriculture students, and individual donors, and volunteers pick up the deliveries, set up the tables, and serve the people who sign in to get the food they need.

There are similar distribution centers in Arroyo Grande, Los Osos, Nipomo, San Luis Obispo, and Oceano, but unlike in Morro Bay, these centers only distribute once a week, on Wednesdays. According to Malinda Diaz, the Food Programs Manager at the Food Bank Coalition, having multiple deliveries in Morro Bay has meant its distributions are inconsistent, with giant deliveries on some days and only a few boxes on others. She says the decision was made to bring Morro Bay’s distribution in line with the other centers, delivering food bank donations on the first, second, and fourth Wednesdays of each month and the USDA delivery on the third Wednesday of the month. She assured me that this would actually increase the available food for each person who depends on the program for aid.

However, this rescheduling may mean that the program will have to relocate, as the Veteran’s Memorial Building may be unavailable for use at the proposed times. Joseph Woods, Morro Bay’s director of Recreation and Parks, is set to speak with representatives from the program today to find a solution to this issue. “[The program] has been a success for years,” he says, “Now is not a time to go backwards.” He assured me that he would work with the Food Bank Coalition and Morro Bay Seniors to find a way to keep the program going.

Cat Flag’s Top News Stories Besides The Shutdown

The latest news about the federal government shutdown crisis is… there is no news. Republicans and Democrats are still divided on how to reopen the government and resolve the debt limit crisis.

Although the Washington impasse is gobbling up the biggest headlines right now, other news stories are continuing to break around the world as they always do. Rather than write another post about the debates in Washington, I have decided to focus today’s post on some of the other news stories that have caught my attention in the past week.

Kenyan authorities name Westgate Mall attackers

This CCTV image of the Westgate Mall attackers was posted on Al-Shabaab's Twitter feed.

This CCTV image of the Westgate Mall attackers was posted on Al-Shabaab’s Twitter feed.

When I last reported on the Westgate Mall attack in Kenya, authorities still did not know the identities of the terrorists who participated in the attack. On Monday, Kenyan authorities finally named the four deceased assailants whose bodies were found in the mall. They were identified as Omar Nabhan, a Kenyan and relative of a senior al-Qaeda operative; Somali-American Khattab al-Kene; Abu Barra al-Sudani from Sudan;  and a fourth man the authorities referred to only as “Umayr”. They also claimed there were two more attackers whose identities remain unknown: a deceased Somali woman whose body was found beside a gun turret, and a sixth terrorist who is believed to have escaped and is currently at large.

In addition to announcing the attackers’ identities, Kenyan authorities also released security-camera videos showing some scenes from the attack as it happened. Cleanup of the mall from the attack is underway, while al-Shabaab, the organization claiming responsibility for the attack, has vowed that more attacks against Kenya will follow.

Chinese authorities open experimental “Free Trade Zone” in Shanghai

The entrance to the new Shanghai "Free Trade Zone", under construction. The zone was officially opened September 30. Image from foreignpolicy.com.

The entrance to the new Shanghai “Free Trade Zone”, under construction. The zone was officially opened September 30. Image from foreignpolicy.com.

In 1980, as part of the “reform and opening up” policies of China’s then-new leader Deng Xiaoping, the city of Shenzhen near Hong Kong was turned into the first of what would be several “Special Economic Zones” where the Communist government would allow for foreign, capitalist businesses to set up shop and invest. These early experiments with capitalism proved an immense success, helping to build China into the economic power it is today.

In response to the global economic downturn, Chinese authorities are hoping that a new, updated version of that same experiment will be the economic boost that China needs. An 11-square-mile district in Shanghai, China’s most populous city, has now been turned into the “Shanghai Free Trade Zone” – an area designed to be even more business-friendly than the rest of the country, by reducing or even eliminating many of the restrictions and regulations on finance and banking that businesses must obey in the rest of China. Furthermore, while the rest of China has laws prohibiting foreigners from owning Chinese companies in “vital” industries such as shipping, medicine, or telecommunications, in the new Free Trade Zone, these restrictions won’t apply.

The goal, according to Chinese officials, is to promote innovation. Reduced restrictions and more Chinese collaboration with foreign investors, it is hoped, will open up opportunities for inventors and entrepreneurs. Already, some investors are looking forward to the opportunities that the zone brings. However, there are also plenty of skeptics who aren’t as sure that China is as committed to this experiment as they say they are. Even with the looser restrictions, there are still 1,000 areas that are listed as off-limits to foreign investors. Plus, it is still not entirely clear to what extent the new economic freedom will also include new political freedoms. There have been contradictory reports regarding whether or not people in the zone will have access to banned websites or video games – some reports say “yes”, some say “no”. As new and experimental as the Free Trade Zone is, perhaps we will simply have to wait to find out for sure.

Syria chemical weapons deal appears to be working, for now

UN chemical weapons inspectors escorted by Free Syrian Army fighters. Image by Bassam Khabieh for Reuters

UN chemical weapons inspectors escorted by Free Syrian Army fighters. Image by Bassam Khabieh for Reuters

When I last reported on the diplomatic complexities of Syria’s chemical weapons program and America’s response to it, President Obama was asking Congress to allow a military operation against the regime of Syrian President Bashar al-Assad. In the weeks since, a surprise diplomatic deal was reached instead: Assad would voluntarily destroy his chemical weapons stockpile, with UN inspectors monitoring the destruction to ensure he keeps his word.

According to Ahmet Uzumcu, head of the UN agency responsible for enforcing the global ban on chemical weapons, the Syrian authorities have been cooperative and helpful. Inspectors are already on the ground in Syria, with a mandate to visit and take stock of all of Syria’s chemical weapons stockpiles and manufacturing facilities by November 1. Meanwhile, Syria has to have a timetable for the destruction of its chemical arsenal by October 27. This is the first time weapons inspectors have had to perform their duties in an active war zone, and UN Secretary-General Ban Ki-Moon fears the inspectors may be caught in the crossfire. To mitigate this risk, the inspectors will be joined by security and medical personnel who can respond quickly to a dangerous situation.

Space probe on mission to Jupiter will become fastest man-made object ever

An artist's depiction of the Juno spacecraft, built by NASA with help from the University of Iowa

An artist’s depiction of the Juno spacecraft, built by NASA with help from the University of Iowa

NASA may be closed, but its space probes are still carrying out their missions regardless of what is happening on Earth. NASA’s latest space probe on a mission to Jupiter, Juno, is soon set to pass by its home planet today in order to get a “gravity boost” on its trajectory. Using Earth’s gravity as a “slingshot”, it will speed away on its course to the gas giant at 25 miles per second. This will make it the fastest thing ever built by humans in history, far faster than a .50-caliber bullet (which only travels at a half-mile per second). As it passes by, it will take a few quick photos of the Earth and moon from “behind” (relative to the sun), allowing us to see the first glimpse at what we would look like to any Martian observers.

Even at its incredible speed, Juno won’t arrive at its destination until 2016. When it arrives, it will make a total off 33 orbits around Jupiter, taking measurements and making observations of the planet and its moons.

Federal government to “Shut Down” today, how will it affect you?

Federal government agencies were instructed to close last night, as Congress failed to approve the funds to keep them open. Image from the Associated Press.

Federal government agencies were instructed to close last night, as Congress failed to approve the funds to keep them open. Image from the Associated Press.

It’s official: the federal government “shutdown” is here. After Congress failed to pass a budget late last night, the Office of Management and Budget ordered federal agencies to prepare to close for the first time in 17 years. Federal employees will be told to stay home without pay, automatically costing the U.S. economy $1 billion of lost potential spending as these workers are forced to save their money and brace for what could be a long wait. The last time a shutdown occurred, it lasted 21 days before Congress reached a compromise. Economic experts predict that if this new shutdown lasts that long, the ripple effects on the economy could lose the United States as much as $55 billion. Already the value of the U.S. dollar has fallen on the news.

How did this happen?

The federal government needs money to operate, and that money comes in two forms. The first is mandatory spending, those programs the government has decided by law to automatically pay for no matter what, such as Social Security, Medicare, student loans, interest payments on the national debt, food stamps, and the salaries of members of Congress and the President. The second is discretionary spending, the money that Congress allocates to the rest of the federal government according to current political needs, and thus can vary from year to year. This category includes national defense, most federal government agencies, spending on education and health matters, the salaries of federal workers, and veterans’ benefits. Discretionary spending must be specifically approved by Congress, or else the government can’t spend any money in these areas, period.

By long-standing tradition, Congress’s budgets cover the period from October 1 through the following year’s September 30th, a period known as a “fiscal year”. This means that Congress has to have a budget in place by October 1 of every year – if there is no budget, the government shuts down. Last night, Congress failed to pass a budget.

President Obama and Democratic members of Congress issued statements blaming Republicans in the House of Representatives for making unreasonable demands, while Congressional Republicans, in turn, blamed the Democrats for refusing to negotiate. Here are the facts:

  1. Back in August, while Congress was in recess, Rep. Mark Meadows (R-N.C.) suggested to his fellow Congressional Republicans that they refuse to pass a budget unless it included provisions to block the Affordable Care Act, better known as “Obamacare”, from taking effect on October 1.
  2. On September 20, the Republican-controlled House of Representatives adopted a budget bill that would have taken away federal funding for Obamacare programs. Democrats, who control the Senate, immediately pledged to block any attempt to alter Obamacare in any way, and President Obama said he would veto the Republicans’ budget.
  3. Democrats see Obamacare as one of the key achievements of President Obama’s administration, and argue that it will bring benefits to millions of uninsured Americans. Republicans argue that the law oversteps the federal government’s authority and that the side-effects of its adoption will hurt the economy.
  4. As the deadline for a new budget grew nearer, the House adopted budget bills that wouldn’t take away Obamacare’s funding, but instead would either repeal portions of the law or delay its implementation for a year. The Senate rejected each of these budget bills, proposing its own budget bill that wouldn’t touch Obamacare at all.
  5. Late last night, House Republicans passed yet another anti-Obamacare budget bill, but this time proposed a conference between Senators and Representatives to put together a compromise. This morning, Senate Majority Leader Harry Reid (D-Nev.) rejected the offer, comparing the Republicans’ insistence on forcing the health care issue to “extortion”.
  6. In spite of the wrangling, both the House and Senate did manage to unanimously pass a bill that will allow U.S. military personnel to continue to receive pay for their service during the shutdown. President Obama signed the bill last night.

Ironically, the government shutdown will not affect the implementation of Obamacare, which takes affect today. Parts of the bill have already been in effect for years, but the core of the program – requiring businesses with more than 50 full-time employees to cover their health insurance needs and creating government-subsidized, low-cost health insurance markets for the remaining uninsured Americans – are to be implemented today as open enrollment for the new health plans begins.

In fact, many other federal government operations will continue in spite of the shutdown. It won’t affect current military operations, training exercises, and other important areas of national defense. It won’t affect personnel deemed “essential” for the public safety, such as police, airport security and air traffic controllers, the Coast Guard, nuclear safety inspectors, and food safety inspectors. It won’t affect government agencies that are self-funded and don’t need Congress to operate, such as the U.S. Postal Service and the Patent and Trademark Office.

So, what will be affected by the shutdown?

  • About 800,000 federal employees will be told that they have been furloughed, and will be forced to clean their desks and return home. They will not be paid during the shutdown, and may or may not be given any compensation once the government re-opens.
  • Federal Courts have some reserve funding to stay open for two weeks, but after that they may need to close.
  • The Centers for Disease Control and Prevention will not be able to provide its annual flu shot program.
  • HUD payments for federal housing projects will be suspended.
  • Small businesses won’t be able to get loans from the Small Business Administration or other federal agencies.
  • National Parks, Smithsonian Museums, and other government-run tourist destinations will be closed.
  • Veterans’ benefits will be affected, as the VA will be unable to process any new applications and its capabilities to handle existing claims will be limited. VA medical care, however, will be unaffected.
  • Most of the IRS staff will be furloughed, so it won’t be able to process returns or conduct audits.
  • Getting a passport or visa will be more difficult, may take longer, and many applications may simply not be processed at all.
  • A wildfire in Yosemite National Park that has been contained by firefighters will still be put out, but cleanup won’t begin until the government re-opens.
  • The Women, Infants, and Children (WIC) program that helps young mothers buy healthy food and get adequate health care for themselves or their children will likely not be able to function for more than a week on reserve money.
  • NASA will be all but shut down, and government agencies that collect statistics such as the U.S. Census Bureau will be closed.
  • Residents of the District of Columbia may find that their garbage isn’t picked up and the streets aren’t swept. Many other city services might also be suspended. However, Mayor Vincent Gray has sworn to keep city services running at normal capacity for as long as possible.
  • Even college football will be affectedthe annual Air Force/Navy game may be postponed as the Department of Defense plans to suspend athletics at its military academies.

NBC’s Today Show asked viewers to respond to the news on Twitter, using the hash-tag #DearCongress. The responses showed overwhelming disapproval for Congress’s actions. One federal worker lamented, “I took a vow to serve the public and I’m sitting at home without a job today. Who are you getting paid to serve?” At press time, World War II veterans are protesting the shutdown by holding a sit-in at the World War II Memorial in Washington, D.C.

Even if Congress manages to pass a budget and re-open the federal government, another fiscal fight looms in just a few weeks. On October 17, the federal government will reach its debt ceiling, meaning that the U.S. Treasury will no longer be able to borrow any more money to pay the bills the federal government has incurred. This would mean that those people to whom the U.S. government owes money would not get paid, defaulting on our national debt. This has never happened before in U.S. history, so it isn’t entirely clear how this scenario would play out, but almost all economists agree its impact would be big, and would be negative.

Even so, a few voices are actually saying the shutdown is a good thing, and that members of Congress should “stand their ground”. As of press time, there appeared to be no obvious resolution in sight.