Why a government shutdown might have been good for America
Washington has reached a deal to keep federal agencies running through the summer. Not everyone is cheering that news
It looks like the government won't be shutting down next week after all. On Thursday, the House passed a short-term spending bill to keep federal programs and agencies funded through September. The measure, which replaces a similar one that runs out on March 27, cleared the Senate on Wednesday, and now just needs President Obama's signature. The bill leaves in place the $85 billion in automatic "sequester" spending cuts, although the Senate tweaked the cutbacks to spare a few priority items, such as meat inspections and highways.
Not everyone is relieved that the threat of a shutdown has evaporated. "It's not that I like government shutdowns," says Ezra Klein at The Washington Post. "I'm as big a fan of national parks as the next guy. I just really, really, really don't like debt-ceiling fights." And that's where Congress' battle over taxes and spending is headed next, as the federal government is on track to reach its borrowing limit again in late July or August.
Government shutdowns are bad. But debt-ceiling fights are a disaster, and if they're not swiftly resolved, they can become a global financial catastrophe...
The sequester was supposed to be a "safe" crisis — scary enough to force us to resolve our problems, but not as disruptive as a government shutdown or a debt-ceiling showdown. It turns out it wasn't nearly scary enough. Now we're passing on a government shutdown, too... We had two opportunities to come to a budget deal without imperiling the global economy. But Congress has decided to wait for the imperil-the-global-economy one instead. Great. [Washington Post]
Others were hoping to use a government shutdown to force their desired policy outcomes. For instance: Many Republicans say they'll now wait until the coming debt ceiling fight to focus on their big goal of defunding ObamaCare, says Erick Erickson at RedState. The trouble with that strategy is that House Speaker John Boehner says he won't put the nation's credit-worthiness at risk to roll back Obama's new health-care entitlement. That means that if Republicans are serious about dismantling ObamaCare, this debate on a short-term budget to prevent a shutdown was the place to draw a line in the sand.
We have the votes, but not the will, to fight this fight, filibuster the continuing resolution, and shut down the government unless the Democrats, at the least, delay implementation of ObamaCare... Now is the time to shut down the government. Now is the time to defund ObamaCare. It will not collapse under its own weight. But the country will collapse under the weight of ObamaCare. [RedState]
Of course, many people are quite relieved, arguing that government shutdowns can be a counterproductive way to make a point about fiscal responsibility. "It seems counterintuitive," says Dan G. Blair at the Chicago Tribune, "but shutdowns do not necessarily save the government money." Preparing for one "takes time and resources that could be spent delivering services, and any savings that are achieved are minimal compared with the size of the federal budget."
Shutdowns can actually cost the taxpayer, because even though furloughed workers are not working, the government traditionally pays them retroactively. The Office of Management and Budget estimated the cost of the shutdowns in 1995 and 1996 at $1.4 billion.
During the two shutdowns in the 1996 fiscal year, the government closed 368 national parks, turning away 7 million visitors; local communities lost that tourism revenue. At the same time, $3.7 billion of a total $18 billion in Washington area contracts were delayed or canceled. The halt in processing visa applications for up to 30,000 foreigners resulted in millions of dollars in losses for the tourist industry and airlines.
A lengthy shutdown, coupled with the sequester, would probably hurt, not help, economic growth. [Chicago Tribune]