Why is the US Government Shutting Down?

First and foremost, the US Government did not collapse. It is not the end of the world for the Americans. The US Government Budget shuts down because the Congress which involves the House of Representatives and Senate failed to pass a budget for the FY October 1, 2013 to September 30, 2014.

The US Constitution mandates that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”.  Appropriations and Law creation are functions of the Congress. When Congress failed to pass the budget request of the president, the government shuts down.

What are the Processes to have a US Gov't Budget? 

The federal government fiscal year begins on October 1 and ends September 30.

The president submits a budget request to the Congress no earlier than the first Monday in January, and no later than the first Monday in February for the succeeding fiscal year.

Once the congress receives the requested budget, the United States House Committee on the Budget (House of Representative) drafts a budget resolution. Simultaneously, the United States Senate Committee on the Budget (Senate) does the same.

Once the budget resolutions of the House and Senate were passed at their respective floors, selected members from each House negotiate to reconcile the differences of their respective budget resolutions through a conference report. This conference report must be approved by both the House and Senate. The approved budget will be sent to the President for his signature. The President however, can veto the Congress approved budget but the Congress can override the veto if 2/3 of the Congress voted to let the budget move forward.

Mandatory Spending

Certain expenditures are not affected by the US Government shutdown because they are protected by specific laws. These certain laws authorize the applicable federal agencies to continue operating indefinitely or for a specific period. Contained in these laws are permanent appropriations (funding) which become automatically available every fiscal year regardless whether a federal budget is passed or not.

Actual mandatory spending for FY 2011 is $2.025 trillion and accounted for 56% of total federal expenditure.

Mandatory spending includes Social Security, Medicare, Medicaid, MERHCF, Children’s Health Insurance Program, SNAP, Unemployment compensation, Supplemental Security Income, Earned income and child tax credits, Temporary Assistance for Needy, Child nutrition, Foster care, Making Work Pay and Other Tax Credits, Civilian and Military Retirement, Veterans Income security, Fannie Mae and Freddie Mac, Deposit Insurance, Higher education, Agriculture and Others.

Essential Services Continue

In a government shutdown, not all employees are getting furlough. There are 1.3 million essential civilian employees who continue to work despite the shutdown. However, if the shutdown continues until October 15, their paychecks will be delayed.

Active service military members will get paid no matter how long the shutdown lasts because the Congress passed a bill guaranteeing them of a paycheck even during shutdowns. President Obama signed it into law.

Here is a partial list of essential employees:

·         Any employee or office that "provides for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property." That means the U.S. military will keep operating, for one. So will embassies abroad.

·         Any employee who conducts "essential activities to the extent that they protect life and property." So, for example: Air traffic control stays open. So does all emergency medical care, border patrol, federal prisons, most law enforcement, emergency and disaster assistance, overseeing the banking system, operating the power grid, and guarding federal property.

·         Agencies have to keep sending out benefits and operating programs that are written into permanent law or get multi-year funding. That means sending out Social Security checks and providing certain types of veterans' benefits. Unemployment benefits and food stamps will also continue for the time being, since their funding has been approved in earlier bills.

·         All agencies with independent sources of funding remain open, including the U.S. Postal Service and the Federal Reserve.

·         Members of Congress can stick around, since their pay is written into permanent law. Congressional staffers however, will also get divided into essential and non-essential, with the latter getting furloughed. Many White House employees could also get sent home.

Non-essential Services Shuts Down

The non-essential services are the functions of the government which without a budget cannot function.

The Office of Management and Budget (OMB) recently ordered the managers of federal agencies to conduct reviews to see which employees are essential or non-essential. Employees classified as non-essential will be furloughed.

Furloughed is a temporary unpaid leave due to special needs of a company. A government shutdown resulted in non essential employees getting furlough.    

Here is an example of employees getting furlough:

Department of Commerce: 87 percent of the agency's 46,420 employees would be sent home. (The Weather Service would keep running, for instance, but the Census Bureau would close down.)

Department of Defense: 50 percent of the 800,000 civilian employees would be sent home while all 1.4 million active-duty military members would stay on. (Environmental engineers, for instance, would get furloughed, and the agency could not sign any new defense contracts.)

Department of Energy: Thanks to multi-year funding, parts of the agency can actually operate for "a short period of time" after Sept. 30. But eventually 69 percent of the agency's 13,814 employees will be sent home. (Those in charge of nuclear materials and power grids stay. Those conducting energy research go home.)

Environmental Protection Agency: 94 percent of the 16,205 employees will be sent home. (Those protecting toxic Superfund sites stay. Pollution and pesticide regulators get sent home.)

Federal Reserve: Everyone would stay, since the central bank has an independent source of funding.

Department of Health and Human Services: 52 percent of 78,198 employees would be sent home. (Those running the Suicide Prevention Lifeline would stay, those in charge of investigating Medicare fraud would go home.)

Department of Homeland Security: 14 percent of the 231,117 employees would go home. (Border Patrol would stay. Operations of E-Verify would cease. The department will also suspend disaster-preparedness grants to states and localities.)

Department of Housing and Urban Development: 95 percent of the 8,709 employees would go home. (Those in charge of guaranteeing mortgages at Ginnie Mae would stay, as would those in charge of homelessness programs. Almost everything else would come to a halt.)

Department of Interior: 81 percent of the 72,562 employees would be sent home. (Wildlife law enforcement officers would stay, while the national parks would close.)

Department of Justice: 15 percent of the 114,486 employees would go home. (FBI agents, drug enforcement agents, and federal prison employees would stay. The department would continue running background checks for gun sales. Some attorneys would go home.)

Department of Labor: 82 percent of the 16,304 employees would be sent home. (Mine-safety inspectors will stay. Wage and occupational safety regulators will go home. Employees compiling economic data for the Bureau of Labor Statistics will also get furloughed.)

NASA: 97 percent of the 18,134 employees would be sent home. (Scientists working on the International Space Station will stay. Many engineers will go home.)

U.S. Postal Service: Everyone would stay, since the Postal Service is self-funded.

Social Security Administration: 29 percent of the 62,343 employees would be sent home. (Claims representatives would stay; actuaries would go home.)

Supreme Court and federal courts. Federal courts, will continue to operate for approximately two weeks with reserve funds. After that, only essential employees would continue to work, as determined by the chief judge, with the rest furloughed. (The Supreme Court will continue to operate when it opens Oct. 7, as it did in previous shutdowns.)

Department of Treasury: 80 percent of the 112,461 employees will be sent home. (Those sending out Social Security checks would stay; IRS employees overseeing audits would go home.)

Department of Transportation: 33 percent of the 55,468 employees will get sent home. (Air-traffic controllers will stay on; most airport inspections will cease.)

Department of Veterans Affairs: 4 percent of the 332,025 employees would go home. (Hospital workers will stay; some workers in charge of processing benefits will go home.)

Why the House and Senate are at Odds with One Another?

The US congress is composed of the House of Representative and the Senate. Both are distinct and separate legislative body. A budget cannot be passed without the concurrence of both bodies.

The current gov't shutdown is due to the disagreement over the budget between the House of Representative controlled by the Republicans and Senate held by the Democrats. This impasse leads to a budget not getting passed.

At the heart of the House and Senate impasse is Obamacare. Republican controlled House wants to delay or defund Obamacare. The Democrat majority Senate wants to remove those provisions in the budget, and so is President Obama. Remember, President Obama is a Democrat.

Republicans and Democrats have their own political ideology. Here are some of the differences:

	Democrat	Republican
Philosophy:	Liberal	Conservative
Economic Ideas:	Favor minimum wages and progressive taxation i.e. higher tax rates for higher income brackets.	Believe taxes shouldn't be increased for anyone (including the wealthy) and that wages should be set by the free market.
Stand on Military issues:	Decreased spending	Increased spending
Stand on gay marriage:	Support (some Democrats disagree)	Oppose (some Republicans disagree)
Stand on abortion:	Should not be made illegal; support. Roe v. Wade (some Democrats disagree)	Should not be legal; oppose Roe v. Wade (some Republicans disagree)
Stand on Death penalty:	While support for the death penaltyis strong among Democrats, opponents of the death penalty are a substantial fraction of the Democratic base.	A large majority of Republicans support the death penalty.
Social and human ideas:	Based on community and social responsibility	Based on individual rights and justice
Traditionally strong in states:	California, Massachusetts	Oklahoma, Kansas, Texas
Symbol:	Donkey	Elephant
Color:	Blue	Red
Founded in:	1824	1854
Website:	www.democrats.org	www.gop.com
Senate Leader:	Harry Reid	Mitch McConnell
Chairperson:	Debbie Wasserman Schultz	Reince Priebus
Famous Presidents:	Franklin Roosevelt, John F. Kennedy, Bill Clinton, Woodrow Wilson, Jimmy Carter	Abraham Lincoln, Teddy Roosevelt, Ronald Reagan, George Bush, Richard Nixon

Sources:

http://www.law.cornell.edu/uscode/text/31/1105

http://en.wikipedia.org/wiki/United_States_federal_budget

http://en.wikipedia.org/wiki/United_States_budget_process

http://en.wikipedia.org/wiki/Mandatory_spending

http://www.fas.org/sgp/crs/misc/RL33074.pdf

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/30/absolutely-everything-you-need-to-know-about-how-the-government-shutdown-will-work/

http://www.washingtonpost.com/blogs/federal-eye/wp/2013/09/18/omb-to-agencies-start-making-shutdown-plans/ 

http://www.gao.gov/legal/lawresources/antideficiencybackground.html

http://www.diffen.com/difference/Democrat_vs_Republican