Defunding Obamacare

The latest news is that the GOP is threatening to shut down government and default on the debt unless Obamacare is shut down or delayed.  Here are some interesting things to note:

• As Wonkblog explains, while there is a lot of hyperbole about the defunding of Obamacare, most of Obamacare funding actually has been separately appropriated as part of the Patient Protection and Affordable Care Act.  The Department of Health and Human Services has already been denied any funding to help implement Obamacare.  So, it is unclear whether the current budget debate will have any effect.  If the GOP takes this to the brink while "discretionary" government services would be shut down, Obamacare implementation will continue unimpeded. 

• A second interesting factoid is that the GOP budget actually assumes much of the benefits of Obamacare.  It appears that the House GOP budget leaves intact the tax increases assumed in Obamacare and the Medicare savings.  In fact, it also leaves the patient protection part untouched - i.e. it does not impact the coverage of preexisting conditions etc.  The tax and Medicare provisions though are particularly astonishing as the GOP budget would not balance, ever, without them.

• Is this sort of dysfunction and polarization the norm?  This article argues with some excellent data that the dysfunction is actually quite unusual for the recent past, although may have been more common pre 1930s.

• What would happen if the threatened shut down occurs.  Well, it depends.  The sequester has been managed in a particularly interesting manner by Obama where he has reduced long term discretionary investments and instituted furloughs instead of lay-offs and allowing the detrimental effects to flow to operations.  This has meant that the effects have been significantly more muted than predicted, although many economists fear, the long term damage as a result is far more serious.  It isn't clear whether Obama would exhibit the same sort of ingenuity on the shut down.  What is clear though is that the anticipated effects a debt default are far worse.  

• There is a case to be made that the debt ceiling is unconstitutional.  Congress authorized the spending.  Congress authorized the revenues.  The difference is paid with debt.  The 14th amendment states: "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."  It isn't clear that Congress is empowered to question the validity of debt it authorized by law.