Home' Trinidad and Tobago Guardian : October 10th 2013 Contents BG14 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 2013 • WEEK TWO
Provision of Equipment and Supplies for the
Ministry of Health
Publication reference : EuropeAid/134857/D/SUP/VC
The Government of St. Vincent and the Grenadines intends to award a supply contract
for the provision of equipment and supplies to the Ministry of Health in St. Vincent and
the Grenadines with financial assistance from the 10th European Development Fund
(EDF) programme of the European Union. The tender dossier is available from the
National Authorising Officer for the EDF Operations, NAO's Support Unit, Central
Planning Division of the Ministry of Finance and Economic Planning, 1st Floor
Financial Complex, Kingstown, St. Vincent and the Grenadines (Tel. (784) 457-2182,
Fax (784) 456-2430) and will also be published on the EuropeAid website:
Additionally the tender dossier can be found on the Government of St. Vincent and the
Grenadines' website: http://www.gov.vc and the NAO's Support Unit's website:
The deadline for submission of tenders is November 22, 2013 at 1:00 p.m.
Possible additional information or clarifications/questions shall be published on the
websites listed above.
As midnight on September 30
approached, everybody on Capitol
Hill blamed everybody else for the
imminent shutdown of America s
government. To a wondering world,
the recriminations missed the
When you are brawling on the
edge of a cliff, the big question is
not "Who is right?," but "What
the devil are you doing on the edge
of a cliff?"
The shutdown itself is tiresome,
but bearable. The security services
will remain on duty, retirees will
still receive their checks and the
astronauts on the International
Space Station still will be able to
breathe. Some 800,000 nonessen-
tial workers at federal agencies, out
of 2.8 million, are being sent home,
while another 1.3 million are being
asked to toil on without pay. Non-
urgent tasks will be shelved until
a deal is reached and the money
starts to flow again. If that happens
quickly, the economic damage will
be modest: perhaps 0.1 per cent to
0.2 per cent off the fourth-quarter
growth rate for every week the gov-
ernment is closed.
The trouble is, the shutdown is
a symptom of a deeper problem:
The federal lawmaking process is
so polarized that it has become
paralyzed. If the two parties cannot
bridge their differences by around
October 17, disaster looms.
Battles over spending are nothing
unusual. Indeed, Congress has not
passed a budget on time since 1997.
This battle represents something
new, however. House Republicans
are blocking the budget not because
they object to its contents, but
because they object to something
else entirely: President Barack
Obama s healthcare reform, a big
part of which started to operate
Their original demand was to
strip all funding from Obamacare.
In other words, they wanted
Democrats to agree to kill their own
president s biggest achievement.
That was never going to happen.
As the deadline for a budget deal
approached, Republicans scaled
back their demands: Instead of
defunding Obamacare, they said
its mandate for individuals to buy
health insurance or pay a fine
should be delayed for a year.
That may sound more reason-
able, but it isn t, for two reasons.
First, delaying the mandate could
wreck the whole reform. Oba-
macare sits on two pillars. Everyone
is obliged to have insurance, and
insurance firms are barred from
charging people more because they
already are ill. If only the second
rule applies, the sick will rush to
buy insurance but the healthy will
wait until they fall ill before doing
so. Insurers will have to raise pre-
miums or go bust, making coverage
unaffordable without vast subsidies.
Obamacare will enter a death spiral and
possibly collapse. For some Republicans,
that is the goal.
The second reason is that Republicans
are setting a precedent which, if fol-
lowed, would make America ungovern-
able. Voters have seen fit to give their
party control of one arm of government,
the House of Representatives, while
handing the Democrats the White House
and the Senate. If a party with such a
modest electoral mandate threatens to
shut down government unless the other
side repeals a law it does not like, seem-
ingly settled legislation always will be
vulnerable to repeal by the minority.
Washington will be permanently paral-
ysed and America will be condemned
to chronic uncertainty.
It gets worse. Later this month the
federal government will reach its legal
borrowing limit, known as the "debt
ceiling." Unless Congress raises that
ceiling, Uncle Sam soon will be unable
to pay all his bills.
In other words, unless the two parties
can work together, America will have
to choose which of its obligations not
to honor. It could slash spending so
deeply that it causes a recession, or it
could default on its debts, which would
be even worse and unimaginably more
harmful than a mere government shut-
down. No one in Washington is that
America enjoys the "exorbitant priv-
ilege" of printing the world s reserve
currency. Its government debt is con-
sidered a safe haven, which is why Uncle
Sam can borrow so much, so cheaply.
America will not lose these advantages
overnight, but anything that undermines
its creditworthiness -- as the farce in
Washington surely does -- risks causing
untold damage in the future.
It is not only that America would
have to pay more to borrow. The reper-
cussions of an American default would
be both global and unpredictable.
It would threaten financial markets.
Since American Treasuries are liquid
and safe, they are widely used as col-
lateral. They are more than 30 percent
of the collateral that financial institutions
such as investment banks use to borrow
in the US$2 trillion "tri-party repo"
market, a source of overnight funding.
A default could trigger demands by
lenders for more or different collateral.
That might cause a financial heart attack
like the one prompted by the collapse
of Lehman Brothers in 2008.
In short, even if Obamacare were as
bad as tea-party types say it is, it still
would be reckless to use the debt ceiling
as a bargaining chip to force its repeal,
as some Republicans suggest.
What can be done? In the short term
House Republicans need to get their
priorities straight. They should pass a
clean budget resolution without trying
to refight old battles over Obamacare.
They should also vote to raise the debt
ceiling or, better yet, abolish it. If Oba-
macare really does turn out to be a flop
and Republicans win the presidency
and the Senate in 2016, they can repeal
it through the normal legislative process.
In the longer term America needs to
tackle polarisation. The problem is espe-
cially acute in the House, because many
states let politicians draw their own
electoral maps. Unsurprisingly they tend
to draw ultra-safe districts for them-
selves. This means that a typical con-
gressman has no fear of losing a general
election, but is terrified of a primary
challenge. Many therefore pander to
extremists on their own side rather than
forging sensible centrist deals with the
This is no way to run a country. Elec-
toral reforms, such as letting independ-
ent commissions draw district bound-
aries, would not suddenly make America
governable, but they would help.
It is time for less cliffhanging and
more common sense.
@2013 Economist Newspaper Ltd.
(Distributed by the New York Times
No way to
run a country
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