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Debt Doomsday Will Come Early For DC

By Annie-Rose Strasser on October 9, 2013 at 11:51 am

"Debt Doomsday Will Come Early For DC"

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DC StatehoodWhile all eyes are focused on the looming October 17 deadline for Congress to raise the debt ceiling or force the country into default, the residents of the town where all the drama is happening are worrying about a different date: On or around October 13, the District of Columbia will run out of money to keep its own local government open.

The city council of Washington, DC, has no control over its own budget. Rather, since the roughly 600,00 residents of DC don’t have a governor or a state to call home, the city government of the District needs Congressional approval to spend money — money that it makes through local tax revenue, not U.S. taxpayer dollars. That approval is wrapped up into every budget that Congress passes and, when it doesn’t get a budget passed in time, the DC government is not allowed to spend, just like the federal government.

The only reason that the DC government didn’t shut down on October 1 is because Mayor Vince Gray (D) declared all city employees “essential” and tapped into the city’s “rainy day” fund to keep paying them until Congress got its act together.

But there’s not enough money in the fund to last until October 17th, when all hopes are that Congress will finally work out a deal to both fund the government and avoid default. Rather, city officials estimate that the rainy day fund will be tapped out by October 13. After that, the DC government will go into shutdown mode — meaning that fire departments, trash collection, some buses, the city’s university, and a host facilities and programs will be put on pause.

On Tuesday, Mayor Gray sent a letter asking for a meeting with President Obama, House Majority Leader John Boehner (R-OH), and Senate Majority Leader Harry Reid (D). He hopes to convince them to pass legislation that allows DC to spend its money freely during the remainder of the shutdown — and, moreover, to “decouple” Washington’s city budget from the federal government’s.

“In no other part of our country are Americans facing the loss of basic municipal or state services due to the federal government shutdown,” he wrote.

Gray’s letter also pointed out that many of the city’s services are already feeling the consequences of the shutdown: Payments for Medicaid providers in the District are on hold, and DC failed to make its quarterly payment to the Washington Metropolitan Area Transit Authority this month. Gray also ordered city workers last week to start collecting trash from the parks that are owned by the National Park Service. They are already shut down, but since there’s trash inside the garbage cans there, there’s a growing problem of “rodents and other vermin.” That also means DC’s picking up the $58,000 bill for the work.

That could only get worse if DC can’t pay for its water and sewage authority, keep its unemployment benefit offices open (especially needed given the number of furloughed federal employees in DC), issue permits and licenses from the Department of Motor Vehicles, pick up trash and sweep the streets, or keep its brand new healthcare marketplaces established by Obamacare running.

During the 1996 shutdown, Congress appropriated funds to keep DC’s city services running while they worked out a deal for the federal government. That’s a lesson they only learned, as Mike DeBonis points out in the Washington Post, after an earlier shutdown cost the city “$7.3 million in wages paid to employees who were not required to report to work, plus about $78.5 million in revenues that went uncollected or were collected late.”

Gray hopes that his meeting can convince Boehner, Reid, and Obama to do the same thing now — approve one-off legislation to allow DC to keep using its own funding to run the city. In fact, the House already passed emergency legislation that would do just that. But because House Republicans have used a so-called “piecemeal” approach to refund only the government programs they like, the Senate has thus far blocked any measure that would independently fund one thing without restoring funding to the whole government.

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