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Saturday, Feb. 24
The Indiana Daily Student

politics

Furloughed employees are back on the job

Furloughed federal employees are back on the job.

Following a 16-day government shutdown and gridlock Congressional debates, Congress passed legislation to end the government shutdown by temporarily raising the nation’s debt limit, avoiding the first default in American history.

President Obama signed the legislation at about 12:30 a.m. Thursday. The Office of Management and Budget for the White House announced furloughed federal employees will return to their jobs Thursday.

As a result of the first government shutdown in 17 years, an estimated 800,000 federal workers were furloughed and about 12,000 of Indiana’s 23,000 employees were placed on unpaid leave, according to the Washington Post.

Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., revealed a bipartisan proposal to raise the debt limit and end the shutdown shortly after the Senate session began Wednesday, according to McClatchy Tribune Information Services.

The agreement will allow the government to continue borrowing to pay its bills through Feb. 7 and would provide funding to reopen the government and keep it running through Jan. 15.

The Senate voted 81 to 18 to approve the proposal. The House then approved the Senate proposal 285 to 144, according to the Associated Press.

Rep. Todd Young, R-9th District, voted for the plan to avoid default on the national debt and to end the shutdown, he said in a Facebook post.

“But this is only the beginning: Under this plan, government funding will again run out in just three months, and we’ll be up against our borrowing limit in a mere four months,” Young said.

Willard Witte, professor emeritus of economics at IU, said the general uncertainty about whether or not Congress would reach a deal by the midnight deadline has affected household consumption spending and business confidence and investments.

“In the financial markets there has been some increase in interest rates, which can also have a negative effect on spending,” Witte said.

Witte said the economic effects will become more severe each time an extension runs out.

“An actual default would be far more serious, but since it would be totally unprecedented, exactly how it would play out is hard to predict,” Witte said. “There would certainly be strong reaction in financial markets — higher interest rates, a drop in the stock market, etc.”

Lee Hamilton, director of the Center on Congress at IU and former U.S. representative from Indiana’s 9th District, said the recent agreement doesn’t solve anything, it just creates another timeline.

“They seem to be unable to deal with these fundamental problems and not solve them,” Hamilton said.

Hamilton said the really serious problem is the government isn’t confronting the core problems, because they were overwhelmed with trying to keep the government open and get through the debt ceiling crisis.

Hamilton said the government should be dealing with some of the country’s fundamental problems, such as creating jobs and putting the federal budget on a more sustainable path.

“The country just looks bad in eyes of much of the world,” Hamilton said. “We’ve become an object of some ridicule. It’s a very serious matter.”

Hamilton said the record of recent months is not encouraging.

“There is a lot of doubt now about the United States leadership and disappointment with not dealing more effectively with our problems,” Hamilton said.

Follow reporter Matt Stefanski on Twitter @stefanskimatt.

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