United States: Government Unemployment in 5,4,3,2,1…?

A few hours before the end of the 2013 fiscal year, the budget deal for 2014 is still up in the air in the United States, threatening the function of the government and its agencies.

Since Carter’s presidency and in the wake of a memo issued by the Ministry of Justice, it is assured that the government, contrary to previous practice, cannot assume that Congress will in the end agree and continue to operate as if nothing happened. Only public services considered essential may continue their activities.

After 10 days of legislative to and fro, the Senate has rejected 54-46 a finance bill draft on Monday that would avoid a government shutdown—actually, postponing the deadline of the old finance act to November 15. Thus, the Senate refused the bill passed by the House of Representatives. Indeed, it is the House of Representatives who plays spoilsport. Republicans who serve there, under pressure particularly from tea partiers, went out of their way to defer the implementation of Obamacare, which has become their war horse.

Consequently, they are constantly introducing provisions and amendments to the finance bill in the form of “budget riders,” which will one way or another empty the notorious law of substance. In contrast, the mostly Democratic Senate wants a resolution free of waste.

Members of Congress have until midnight tonight to agree. If this is not the case—and at this stage, this would require an unprecedented alignment of political stars—the government must stop all authorization of expenditures. This will be the first time since the confrontation between President Clinton and the Republicans, led by Newt Gingrich, which had led to the closure and layoff of hundreds of thousands of civil servants between December 16, 1995 and January 6, 1996.

Faced with this prospect, financial markets have become risk-averse. It should be pointed out that the cost of this fiscal paralysis is estimated in the hundreds of millions of dollars by bank analysts, especially since one problem can hide another. Once the issue of the budget is settled, the raising of the federal debt ceiling remains to be negotiated: In fact, if the situation does not change by October 17, the United States will no longer be able to pay its debt.