Very early this morning, President Obama signed into law a continuing resolution that ends the government shutdown that began Oct 1st, increases the nation’s debt-ceiling limit and establishes a special joint House-Senate committee to conference on the federal budget.
The legislation was brokered by Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). It was approved 81-18 by the Senate and then by a 285-144 vote in the House.
The bipartisan agreement calls for a proposed budget resolution to be put together by December 13th, funding of the government through January 15th and suspends the debt limit through February 7th.
The most immediate effect of the deal for the transport sector, pointed out Politico.com, is that “DOT can get to work reopening its various agencies shuttered for the past two and a half weeks, NTSB investigators can look at fatal accidents again and the EPA staffers handling the environmental reviews for transportation projects will all be back to work.”
“With the federal government shut down for more than two weeks, federal regulatory work ground down to a virtual halt,” observed NTEA (National Truck Equipment Assn.) “The majority of agency personnel were on furlough and unable to respond to phone calls or emails. Publications of new and proposed rules in the Federal Register trickled down to just a few per day.
“Regulatory deadlines, however, did not change during the shutdown,” NTEA added. “Comments on pending regulatory proposals were being accepted electronically but will be analyzed only now that the shutdown has ended.
But getting regulatory agencies and the rest of the federal-government apparatus back up to speed is just the tip of the post-shutdown iceberg. There are two much larger concerns for fleet owners to consider.
Number one, although perhaps needless to say, is worrying about whether Washington politics will implode again as each of the new deadlines come rapidly into view and further stall progress on resolving the nation’s massive budget issues.
Secondly, fleet owners must weigh the potential impact on their operations of the reported massive hit the economy has taken from the 16-day government shutdown.
According to the credit-rating agency Standard & Poor’s, the shutdown to date “has shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth, or taken $24 billion out of the economy.”
A new report, prepared by Macroeconomic Advisers LLC this week for the Peter G. Peterson Foundation, that “examines the cost of crisis-driven fiscal policy over the past few years” finds that that the continuing budget clashes have cut U.S. economic growth by roughly 0.3 percentage points a year since 2009.
In addition, Macroeconomic Advisers said that the fiscal feuding added more than a half-point to this year’s unemployment rate— equaling some 900,000 jobs. The firm stressed that “the repeated cycle of lurching from crisis to crisis has significant and real costs to the U.S. economy”
Regarding what may result as those further fiscal deadlines hit, economists reportedly see the governing-by-crisis mode that has become the norm as compelling businesses to hold onto their cash instead of hiring more workers, buying more equipment and making capital investments. "Increasingly I'm of the view that the reason why our economy can't kick into a higher gear is because of the uncertainty created by Washington," said Mark Zandi, chief economist of Moody's Analytics, per a Reuters post.
U.S. Chamber of Commerce president & CEO Thomas J. Donohue also stressed the importance of getting governance back on track in a statement on the deal: “The Chamber urges the administration and Congress to avoid a self-made economic crisis in upcoming debates by committing to work with one another on a plan to restrain federal spending, correct the unsustainable growth of entitlements, reduce our debt, and enact comprehensive tax reform.
“The challenges we face are real and can be accomplished without the political brinksmanship we've seen on both sides over the past few weeks,” Donohue continued, “Moving forward, we hope Congress and the administration seize the opportunity to improve our economy and the ensure the fiscal health of our country.”
On the other hand, as reported by Bloomberg.com, governing by crisis has become so familiar to the financial markets that they “weren’t disturbed by the impasse,” expecting-- as did many political experts— that an 11th-hour deal would be cut.
The legislation hammered out by Reid and McConnell instructs House and Senate leaders to name conferees to a budget-conference committee to be led by co-chairmen Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI). Murray and Ryan chair the Senate and House budget committees, respectively. “I look forward to convening the first conference on a budget resolution since 2009,” noted Ryan in a statement. “And though a budget resolution by itself can’t resolve our spending problem, I’m committed to making a bipartisan budget conference a success.”
According to a statement by Sen. Reid, the special joint committee will be charged with producing a “negotiated budget resolution” in December and will be “the appropriate place to discuss our differing views of the best way to chart a course for economic growth.”
“I look forward to convening the first conference on a budget resolution since 2009,” noted Rep. Ryan in a statement. “And though a budget resolution by itself can’t resolve our spending problem, I’m committed to making a bipartisan budget conference a success.” Sen. Murray remarked in a statement that “I am looking forward to the big challenge that bridging the significant differences between the House and Senate budgets presents, I am absolutely committed to finding common ground…”
