U.S. 10 days from government shutdown

Canada could be 10 days away from having issues moving goods across the border with its largest trading partner.

Tea Party elements in the U.S. Congress pushed their GOP colleagues to follow them on a bill that threatens to shut down that country’s government is a week and a half, unless all funding for President Barack Obama’s health care law is stripped from the major appropriations bills that supply funding for federal government operations, and some state programs, nationwide.

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Services that could be impacted include customs and border agencies (they won’t shut down entirely, but can slow significantly if some workers are furloughed), passport services (including applications for Nexus services used by signers of the NAFTA treaty), and entities that regulate monetary transfers both inside U.S. borders and internationally.

If brinksmanship leads to a protracted shutdown, it could eventually cause problems for Canadian producers of lumber and other building materials that are used by America’s newly rebounding housing markets, since the Federal Housing Administration is directly responsible for loan guarantees on more than 30% of U.S. mortgage applications.

The fight is coming on a stopgap funding measure required to keep the government fully running after the Oct. 1 start of the new budget year. Typically, such measures advance with sweeping bipartisan support, but tea party activists forced GOP leaders — against their better judgment — to add a provision to cripple the health care law that is the signature accomplishment of Obama’s first term.

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The 230-189 vote sets the stage for a confrontation with the Democratic-led Senate, which promises to strip the health care provision from the bill next week and challenge the House to pass it as a simple, straightforward funding bill that President Barack Obama will sign.

The temporary funding bill is needed because Washington’s longstanding budget stalemate has derailed the annual appropriations bills required to fund federal agency operations.

The fight over the must-do funding bill comes as Washington is bracing for an even bigger battle over increasing the government’s borrowing cap to make sure the government can pay its bills. Democrats say they won’t be held hostage and allow Republicans to use the must-pass measures as leverage to win legislative victories that they otherwise couldn’t.

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Republicans say the measure is required to prevent a government shutdown that would delay pay for federal workers, send non-essential federal workers home, and close national parks (a potential boon for the Canadian side of Niagara Falls). Essential programs like air traffic control, food inspection and the Border Patrol would keep running, and Social Security benefits, Medicare and most elements of the new health care law would continue.

“If this legislation is not enacted and we embark on a government shutdown, the consequences are severe: Our brave men and women of our military don’t get paid; our recovering economy will take a huge hit, and our most vulnerable citizens — including the elderly and veterans who rely on critical government programs and services — could be left high and dry,” said House Appropriations Committee Chairman Harold Rogers, R-Ky.

Even before Friday’s House vote, lawmakers were looking a couple of moves ahead on the congressional chessboard to a scenario in which the Democratic Senate would remove the “defund Obamacare” provision and kick the funding measure back to the House for a showdown next weekend.

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GOP leaders haven’t said what they’ll do then, but with the deadline looming at midnight on Monday, Sept. 30, any prolonging of the impasse could spark the first shutdown since the 1995-96 battle that helped resurrect President Bill Clinton’s popularity.

An earlier plan by GOP leaders including House Speaker John Boehner, R-Ohio, designed to send a straightforward bill to keep the government running through Dec. 15, ran into too much opposition from tea party members who demanded a showdown over the Affordable Care Act, the official name of what Republicans have branded Obamacare.

Boehner has sought to reassure the public and financial markets that Republicans have no interest in either a partial government shutdown when the budget year ends or a first-ever default on a broader set of U.S. obligations when the government runs out of borrowing ability by mid- to late October.

“Let me be very clear,” Boehner said Thursday. “Republicans have no interest in defaulting on our debt — none.”

GOP leaders want to skirt the shutdown confrontation and seek concessions when addressing the need to raise the debt ceiling next month, but Obama says he won’t be forced into making concessions as he did in the 2011 debt crisis, when he accepted $2.1 trillion in spending cuts over 10 years. The entire U.S. Congress faces re-election next year, so a prolonged shut down, or series of furloughs, could play poorly when voters hit the polls in November 2014.

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Republicans held a meeting Friday morning with the rank and file to discuss the debt limit measure. Aides said the GOP’s debt limit plan would permit new borrowing for a year, paired with a mandate to permit construction of the Keystone XL oil pipeline, a framework to reform the loophole-cluttered U.S. tax code, limits on medical malpractice lawsuits and higher Medicare premiums for higher-income beneficiaries. Even with the grab bag of GOP chestnuts, some ardent conservatives are likely to balk at voting for any debt limit measure.

Meanwhile, a GOP family feud simmered. Many Republicans in both the House and the Senate see the “defund Obamacare” strategy as futile and faulted architects Sens. Ted Cruz, R-Texas, and Mike Lee, R-Utah, for whipping up expectations among tea party lawmakers that the fight could be effectively waged.

Lee is using the issue to raise money for his campaign coffers. “Please, give whatever you can to my emergency effort to defund Obamacare right now,” reads a fundraising appeal from Lee sent Friday. “We owe it to the American people to do everything we can to end this nightmare before time runs out on October 1st.”

A key part of the law, the opening of state insurance exchanges, is set to take effect Oct. 1, so the effort to gut the health care law has added urgency among conservative activists.