Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
After a tumultuous first half of October, Congress passed and the president signed a deal to re-open the federal government and raise the debt ceiling just in time to avoid defaulting on the nation’s debt obligations.
The agreement will fund the government through Jan. 15 and extend its borrowing authority through Feb. 7. It also orders a bipartisan House-Senate budget conference committee to negotiate long-term fiscal reforms and report to Congress by Dec. 13.
The deal also keeps the across-the-board federal “sequester” cuts in place.
The agreement did not resolve fundamental differences between congressional Democrats and Republicans, however, and there remain concerns that the government could face another shutdown early next year.
The partial government shutdown began on Oct. 1, when a continuing resolution that had been funding the federal government expired and the House and Senate were unable to agree on a budget deal. Approximately 800,000 federal employees across the country deemed non-essential to the execution of constitutional duties or the protection of life or property were furloughed without pay.
In Massachusetts, immediate impacts were felt with the closure of all 19 national parks located within the state. The parks are integrated into local economies and collectively play a large role in the state’s tourism economy.
Approximately 35 projects to develop more than 1,500 units of affordable housing units statewide through the HOME Investment Partnership were delayed by the shutdown.
Other negative impacts loomed, including a lack of funding, as of Nov. 1, for the Low-Income Home Energy Assistance Program (LIHEAP). Programs such as unemployment benefits and Temporary Aid to Needy Families were expected to be adversely affected if the shutdown stretched into December or January.
As October progressed, a series of spending proposals arose from the House and Senate. House leadership attached several policy objectives to their offers, largely around defunding the Affordable Care Act, which the Senate rejected.
As the impasse wore on, attention began to shift to the impending date on which Treasury Secretary Jack Lew said that the nation would reach its debt ceiling: Oct. 17. Without congressional approval to increase the debt ceiling, the nation would risk defaulting on its debt obligations. A default was widely regarded as a global economic calamity.
On Oct. 15, Fitch Ratings, the third-largest of the world’s credit-rating companies, placed the nation’s bond rating status on “rating watch negative,” meaning that there was a significant chance of a pending downgrade due to the risk of a default. A downgraded rating would make government-issued debt less attractive to investors. In 2011, the financial services firm Standard & Poor’s downgraded the country’s rating from an AAA, the highest possible, to an AA+ in the face of a potential default.
In the late evening hours of Oct. 16, both houses of Congress voted to approve a fiscal deal that originated in the Senate, and President Barack Obama signed the bill into law in the early hours of Oct. 17.
According to an estimate from Standard & Poor’s, the 16-day shutdown cost the national economy approximately $24 billion.
Due to disagreements between the House and the Senate, the country has operated without an annual budget since 2010, instead relying on a series of short-term spending resolutions.