The government shutdown is now entering its second week. Is the US political situation that produced it getting better – or worse?
Well, it’s better in the sense that both sides have had a week to look tough. House Speaker John Boehner has shown tea party conservatives that he’ll stick with them past the shutdown cliff, despite pressure to relent from establishment Republicans. President Obama has demonstrated to Democrats that he’ll fight hard to protect a health reform law that reflects the party’s longtime priorities.
It’s Negotiation 101: posture at the outset to establish your position. Then begin a search for solutions from a position of strength.
But that doesn’t seem to be happening in this case. Both sides are continuing to espouse positions the other says it can’t tolerate. Rhetoric is becoming personal and vindictive, and the fight seems to be escalating into a larger showdown that’s about the fighting as much as it is about policies.
So in that sense, things are getting worse. Right now there seems no obvious way out. It’s a classic prisoners’ dilemma, writes veteran Washington hand Stan Collender. While all the parties to the fight may benefit from working together, working together has become so difficult that the worst of all possible outcomes, a longer and more destructive shutdown, may be the result.
“I see the shutdown lasting at least another week ... and two or three more weeks after that are becoming increasingly likely. I’m also raising the likelihood of the debt ceiling not being raised by October 17 – the date Treasury says it will be needed – to 1 in 3 instead of my previous estimate of 1 in 4,” writes Mr. Collender, a senior executive at Qorvis Communications, on Monday on his “Capital Gains and Games” blog.
Here’s how the situation stands: On Sunday, Speaker Boehner reiterated that he won’t bring to the floor a clean government funding bill – one shorn of provisions defunding, delaying, or otherwise modifying "Obamacare." He said he won’t attempt to raise the debt ceiling without Democratic concessions, either.
“The fact is, this fight was going to come one way or another,” Boehner said on ABC News's “This Week."
Secretary of the Treasury Jack Lew, in Sunday show appearances, replied that House Republicans have created a “ridiculous choice” in which getting rid of the Affordable Care Act is the price of opening the government or avoiding a US debt default.
The GOP needs “to open the government," Secretary Lew said on “Fox News Sunday." "They need to fund our ability to pay our bills. And then we’re open to negotiation.”
The current Washington political situation is akin to the Civil War Battle of Gettysburg, in the view of a top House Republican quoted by right-leaning Washington Examiner political writer Byron York in a Sunday column.
At Gettysburg, a Confederate unit out looking for supplies stumbled into Union cavalry. Suddenly, they were caught in a fight they had not intended on terrain they had not picked.
“Everybody just kept feeding troops into it. That’s basically what’s happening now in a political sense. This isn’t exactly the fight I think Republicans wanted to have, certainly that the leadership wanted to have, but it’s the fight that’s here,” this member of Congress told Mr. York.
Does Boehner see any path out of this situation?
It’s possible he does, according to another well-connected conservative journalist, Robert Costa of the National Review.
Don’t read too much into the “fight-to-the-death posturing” of the most adamant Republican House members, Mr. Costa wrote in a Washington Post opinion column last week.
Look instead to the smaller clues of Boehner’s behind-the-scenes talks with House members about a grand package deal that would raise the debt ceiling in return for Democratic concessions on tax and entitlement reform.
Those talks are “evidence of how the impasse will probably end: with an eleventh-hour, smaller compromise that Boehner has been slowly but surely shepherding,” Costa wrote.
Of course, for that to be the case, the Obama administration would have to retreat from its current position that there can be no fiscal negotiations until the government is open and the debt ceiling raised.
House Speaker John Boehner (R) of Ohio is coming face-to-face with the tactics that his party has introduced to contemporary American politics, and boy is it frustrating.
Tea party-fueled Republicans certainly didn't introduce the stonewall into American politics. Last time we checked, the United States Senate was founded on the idea of members in the minority making life unbearable for the majority. See: filibuster.
But the tea party revolution has brought a new wrinkle. Unable to get much of anything through the legislative process, the Republicans found a new lever: the debt ceiling. In 2011, they used the threat of refusing to raise it to win the sequester cuts – their one major victory of the tea party era.
Like football or poker, however, politics is essentially a game (despite Mr. Boehner's protestations to the contrary Friday), and when one team wins, the other is sure to change tactics to prevent it happening again. If defensive coordinators in the National Football League spend late nights in the office devising schemes to solve the read option, why would we not expect the same of strategists in the halls of Congress?
So the Republicans found in 2011 that the threat of global economic meltdown was sufficient to get the Democrats to blink. It shouldn't be so surprising that the Democrats now would be willing to turn the tables. If they didn't, after all, they would be conceding that the Republicans could bully them into concessions they find odious every time a debt-ceiling rise came due – or government funding ran out. (Which is essentially what has happened.)
How do you think that prospect has sat with Senate majority leader Harry Reid (D) of Nevada? No wonder he always looks like Mr. Crankypants. But now he's had enough.
Think of it this way. For a few years, Oakland A's general manager Billy Beane was able to make his bargain-basement teams competitive with the New York Yankees of the world through "Moneyball" – a revolutionary way of assessing baseball talent. Then, everyone started to catch on – including the big spenders – and he lost his advantage.
In other words, the rest of the league caught on and started playing the same game.
Today's stalemate in Congress over the government shutdown and a potential debt-limit increase is little different. For a while, the tea party punched above its weight because it was willing to stand on its principles, seemingly heedless of the outcome. This wasn't wholly new, perhaps, but the depth of the tea party's commitment to its principles certainly threw Congress off balance for a few years.
Now, Democrats are saying: "We can play this game, too." And frankly, this, too, is a matter of principle for the likes of Mr. Reid. For a former boxer who approaches politics with the same subtlety, the desire not to get steamrolled by a group he considers "anarchists" is a matter of the deepest political principle.
The fact is, it is not at all clear where Boehner comes down on all this. His political pedigree suggests that he's closer to Reid as a politician than to his own upstarts. By trade, he's a dealmaker. Yet his job as Speaker depends upon him taking a stand he knows he has virtually no chance of winning this time.
The House will not pass a "clean CR" he said Sunday. In Washington code, "CR" means continuing resolution – a bill to temporarily fund government. In other words, he says the House won't end the government shutdown and avert a debt-limit crisis unless President Obama, Reid, and the Democrats play ball. Boehner's brood wants a replay of 2011.
"This isn't some damn game," a frustrated Boehner told reporters Friday.
Except ... it is, as he very well knows. And now the Democrats are turning the tea party's own rules against him.
The government shutdown is now a work week old. Both sides seem dug in; there’s no deal on the horizon that would allow a funding bill to advance. We don’t know how this will end, but we do know this: at some point, end it will.
Taking into account some things we’ve learned in the last few days, here are some thoughts on what the post-shutdown American political situation will look like.
OBAMACARE SURVIVES. This is a foregone conclusion that’s worth repeating. Nothing President Obama has said in recent days has hinted at any retreat from the position that he would never sign legislation defunding his signature domestic policy achievement.
Yet House Republicans have already scaled back their Obamacare position. First they demanded defunding the Affordable Care Act as the cost of advancing a continuing resolution to fund the government. Then they moved to a one-year delay in implementation.
Given that on this issue Obama is obdurate and the House leadership is not, it’s not hard to see that defunding per se is off the table.
TEA PARTY CONSERVATIVES CONSIDER THAT A DEFEAT. Despite the fact that it looked pretty much impossible to derail Obamacare from the beginning, the hard core on the right who pushed House Speaker John Boehner to link the health law and continued government funding in the first place may well consider its continued existence a stinging loss.
They won’t be consoled by what they consider just tweaks to the law, such as a repeal of its tax on medical devices, or passage of the so-called “Vitter amendment,” which would bar Congress from contributing to the purchase of health insurance on Obamacare exchanges by lawmakers and staff.
“This fight needs to be about defunding Obamacare. We need to keep fighting on that ground,” tweeted conservative pundit Erick Erickson on Friday.
OBAMACARE FACES CONTINUED ATTACKS. What follows from the above points is that the Affordable Care Act, one of the biggest changes in the American social contract in a generation, will begin its implementation period while a significant percentage of Congress continues to attempt to undo it or scale the program back. Remember, the GOP establishment says it differs from the tea party on this issue only on tactics, not the end goal. Senate Republicans want to defund Obamacare too; they just don’t want to shut down the government or not raise the US debt ceiling as part of that effort.
SO DOES JOHN BOEHNER. If the tea party thinks they’ve lost, they’ll look for someone to blame, and Boehner will be at the top of the list. He may have won some personal loyalty from conservative House members who have seen that he’s willing to shut down the government on behalf of the defund-Obamacare effort. But outside activists and some conservative Senate Republicans (we won’t name names, but their initials are “Ted Cruz”) might still greatly complicate Boehner’s life by charging that he’s betrayed the movement.
He’s also under pressure from Democrats and moderates in his party to allow a vote on a clean continuing resolution and/or debt ceiling increase, both of which would almost surely pass. Why does he want that job, anyway? Of all the political leaders involved in this crisis, his position is the most precarious, and it will remain so.
And here's a bonus observation:
NONE OF THIS IS UNDEMOCRATIC. As Ezra Klein of Wonkblog notes, the White House sees the current crisis as about Republicans “trying to create a new, deeply undemocratic pathway through which a minority party that lost the last election can enact an agenda that would never pass the normal legislative process.”
Well, sorry White House, but it isn’t. Undemocratic, that is. As we wrote yesterday, a House-Senate-White House standoff such as we’re currently seeing is just the result of the Constitution at work. It’s our old friend from Politics 101 at work: checks and balances. Sometimes the “checks” piece predominates.
And what’s “normal legislative process?” Tying the defunding of Obamacare to a spending bill upon which most of the government is dependent may be novel and dramatic, even outside accepted practice, but it’s allowed under current legislative rules.
Look, tea party conservatives genuinely believe that the implementation of the Affordable Care Act will be ruinous for the country. (Blogger Andrew Sullivan has a great post Friday on this subject.) Given the way they see the stakes, why wouldn’t they use every legislative tool at their disposal?
President Obama and many Democrats, on the other hand, see Obamacare as the fulfillment of a long-delayed march toward social justice. Would they not go as far as John Boehner has if they felt it was necessary for the health law’s survival?
Both Democrats and the tea party are representing the deeply felt convictions of the voters they represent, not just their personal beliefs. Looked at that way, the current Washington situation may seem not an irrational dispute between politicians, but a reflection of a continued political division in the nation as a whole.
There are numerous press reports Friday that Speaker John Boehner has told some Republican House members that he won’t hang tough on a debt ceiling fight. He’ll agree to use a combination of Democratic and establishment Republican votes to hike the ceiling so as to avoid damaging America’s credit and economy, according to these stories.
Is this really the case? Because if it’s true, that means the worst-case scenario of the current Washington fiscal crisis – a US default on its debts in the midst of a government shutdown – won’t come to pass.
We’ll get to our judgment in a second. First, a public-service reminder: The debt limit problem is separate from the fiscal dispute that’s shut down the government, strictly speaking.
The government is shut down because the appropriations that pay for its activities expired at the end of the fiscal year (Sept. 30), and Congress hasn’t passed a funding bill to keep that money flowing. The debt limit arrives around Oct. 17, when the United States hits a legal limit on the amount of money it can borrow, meaning the Treasury can’t pay many debts already incurred.
The government shutdown has closed national parks. A breach of the debt limit could stop the timely delivery of Social Security checks and Medicare reimbursements, and it could freak out world financial markets dependent on the dollar as a presumed currency of stability in a chaotic world.
OK, back to Speaker Boehner. We’d say the stories that he’s soft on the debt limit are mostly true but have important holes, meaning some partisan fights on the issue might yet lie ahead.
First, consider their source. The stories appear to be based on the word of some Republican moderates reporting what Boehner has told them in private. That could be wishful thinking on their part. It could reflect Boehner just telling them what they want to hear.
Second, look at reality – Boehner certainly has. Any vote to raise the debt ceiling will require Democratic support. In that sense, he’s just telling the truth.
There is a hard core of 20 to 30 conservatives who will never vote to raise the debt ceiling under any circumstances. They haven’t in the past, and they won’t in the future. Period. They might not vote for a debt ceiling hike even if the increase has provisions that eliminate Obamacare, the Environmental Protection Agency, and the Internal Revenue Service.
Mike Allen at Politico on Friday morning quotes an e-mail from a Democratic staffer to this effect. “What everybody is missing is Boehner didn’t say anything new about defaulting. He was always going to need Dem votes to pass a debt ceiling,” the aide writes.
Another thing Boehner didn't say anything about was the exact nature of what his presumed debt ceiling legislation would look like.
Boehner has told other House Republicans that what he’s looking for is some kind of larger deal on tax reform, entitlement reform, and spending reductions in return for an agreement to reopen the government and raise the debt ceiling.
That’s a goal that the speaker has sought for years in negotiations with the White House, only to see it dissolve at the last moment.
“Boehner’s chief goal is conference unity as the debt limit nears, and he’s looking at potentially blending a government-spending deal and debt-limit agreement into a larger budget package,” wrote the National Review’s Robert Costa, whose reporting has provided an invaluable window into House GOP thinking on the current crisis, on Wednesday.
All these reports can coexist without contradiction. Boehner could be thinking of raising the debt ceiling with some Democratic votes – but via a bill that includes some tweaks to Obamacare, a plan for tax reform, some reductions in entitlements, and perhaps increases in some domestic programs.
The speaker’s problem is that there is not actually a clear path to that goal. If he does not include major changes to Obamacare, he’ll lose tea party conservatives. If he does, he’ll lose pretty much the whole Democratic caucus. If he includes revenue increase of some sort in his “grand bargain,” he could lose a majority of his own party. If he does not include concessions on the revenue side, he won’t get Democrats, and so forth and so on.
Did we mention that the White House has insisted that it will accept only a "clean" debt ceiling increase without any added provisions whatsoever?
Meanwhile, conservatives are becoming increasingly suspicious that Boehner, in the end, will cave. Friday’s stories about his debt ceiling position will only increase that feeling. Right now Boehner surely has 20 moderate Republicans willing to vote with Democrats to pass a clean debt ceiling hike, writes right-leaning Allahpundit at Hot Air.
“The only obstacle to passing one is his own personal reluctance to face the political consequences from the right of bringing that hike to the floor," Allahpundit writes. "Show of hands: Who thinks that’ll stop him after two more weeks of tremendous pressure from the center and the left?”
As the government shutdown of 2013 stretches into its third day, one Washington activity that’s still running full speed is blame-throwing. Democrats say the current sorry state of affairs was caused by Republicans, while some Republicans say the problem is Democrats. Others in the GOP complain bitterly that the conservative tea party faction has led its own party off a cliff.
Here’s another thought: What if the whole thing is George Washington’s fault?
OK, we’re using the Father of the Country as a symbol here, but it’s not too far a stretch. Before he was the young nation’s first chief executive, Washington was a Founding Father and the president of the Constitutional Convention of 1787. And some scholars today are claiming that the current US political predicament stems from flaws in the Constitution itself.
It’s a “crisis that demonstrates that presidential democracy sucks,” writes Scott Lemieux, assistant professor of political science at The College of Saint Rose, on the academic blog “Lawyers, Guns & Money.”
Look, before you grab your musket and fife and drum and come after us, just listen to the explanation, OK? We understand that forebears and founding documents are venerated in the United States as in few other nations. That doesn’t mean they’re perfect. We’re talking here about details, not the idea of America itself.
The problem is our old friend checks-and-balances. James Madison et al. wanted a government in which power is diffused and tyranny averted. They designed a system in which a president and two chambers of a legislature are elected separately, yet must govern at the same time. When a dispute arises between these branches, “there is no democratic principle on the basis of which it can be resolved,” wrote the late Juan Linz, a distinguished Yale professor of political science, in a 1990 paper titled “The Perils of Presidentialism.”
In other words, the current standoff is a feature of US democracy, not a bug. There’s no direct method whereby President Obama or House Speaker John Boehner can force the other to capitulate.
“They can point fingers and wave poll results and stomp their feet and talk about ‘mandates,’ but the fact remains that both parties to the dispute won office fair and square,” writes Slate’s Matthew Yglesias, explicating Professor Linz’s ideas.
That would not be the case in a parliamentary democracy such as Britain. In Britain, the head of government holds office because of the support of the majority of a one-chamber legislature. (Basically, the House of Lords does not have much power at this point.)
When a prime minister loses the support of his or her parliamentary majority, there’s a no-confidence vote, followed by either a new parliamentary coalition and new governing cabinet, or a national election to let the people decide.
The US system is not really majority rule. A parliamentary system is.
“[I]n a parliamentary democracy a minority party by itself couldn’t force a crisis or cause the government to collapse,” Professor Lemieux writes.
That said, there are certain aspects of the current US crisis that aren’t structural, in the sense that they aren’t written in the Constitution. Most notable here is the upcoming vote on raising the debt ceiling.
That’s just a function of the way Congress has designed its own budget and spending system. But given the importance to the US and world economies of America paying its already-incurred debts, the debt ceiling vote is a “dangerous toy” that’s been lying around waiting for someone to pick up and use, according to Seth Masket, an associate professor of political science at the University of Denver.
In recent years, minority parties have increasingly turned to such unorthodox tools in an effort to slow or reverse policy change, Professor Masket writes on the political science blog “Mischiefs of Faction.”
State legislative recalls are on the rise, for instance. In the US Senate, the use of the filibuster has increased.
“These are the tools of a frustrated minority party in an era of polarized parties," writes Masket. "When a majority party is advancing an agenda that the minority party finds unacceptable (as is almost inevitable when the parties are so ideologically distinct from each other), the normal methods of disagreement will begin to seem insufficient.”
The House Republican leadership now believes it has a winning strategy for the government shutdown crisis – or if not a complete path to victory, at least tactics that will lead to short-term gains in public opinion for the GOP and that will pressure Democrats to open negotiations aimed at resolving the standoff.
Speaker John Boehner’s new playbook revolves around something Sen. Ted Cruz (R) of Texas suggested earlier: Break up the big government spending bill and try to fund popular programs and agencies with mini-continuing resolutions (CRs).
The virtue of this approach from the GOP point of view is that it could put pressure on Democrats – particularly Senate Democrats – by forcing them to take difficult votes on items such as health care for military veterans. It also unites the fractious Republican House caucus. Tea party conservatives approve, because none of the bills in question would fund operations related to "Obamacare." Other GOP House members see the strategy as a simple move forward.
“The leadership knows this course won’t be easy to hold, and, as ever, any day in the House GOP can be unpredictable. But they’re going to keep at it, knowing conservatives will only tolerate so much, and crossing their fingers that [Senate majority leader Harry] Reid shares the blame and, if pricked in certain spots, starts to bargain,” writes National Review’s Robert Costa.
Meanwhile, the opening round of the GOP's latest approach came Tuesday, when the House leadership brought three mini-CRs to the floor. They would have funded the Veterans Affairs Department, the national parks, and city services in Washington, D.C. (Those still subject to federal appropriations, did you know that?)
These bills lost. They’d made it to the floor under expedited procedures that meant they needed a two-thirds vote to pass, which is a high hurdle. Many Democrats from safe blue seats voted against the mini-bills, despite an impassioned plea from D.C. Delegate Eleanor Holmes Norton that they at least pass the funds for her city.
The House leadership has vowed to try these and other small measures again Wednesday under regular rules, so that the bills can be approved with a simple majority. In that scenario, they’re likely to pass. Then they’ll be sent to the Senate – in all likelihood, to die.
Senator Reid has made it clear he’s not tempted by the prospect of ending the shutdown one bill at a time. That’s because he sees the tactic as a way to open popular parts of the government, lessening pressure on Republicans, while allowing the GOP to still hold hostage some parts of the government, such as the Environmental Protection Agency and discretionary Obamacare funds.
In any case, President Obama has vowed to veto the mini-bills.
“Consideration of appropriations bills in a piecemeal fashion is not a serious or responsible way to run the United States Government. Instead of opening up a few Government functions, the House of Representatives should re-open all of the Government,” said the White House in a statement released Wednesday.
Does the GOP approach stand any chance of success? As Mr. Costa notes, Republicans hope the drip, drip mini-bill approach will put continued pressure on swing- and red-state Democrats worried about taking votes that will damage their standing at home. If Democratic unity cracks, goes the thinking, then party leadership will begin looking for a negotiated exit.
The problem for Republicans is that right now their party is the one showing cracks. A number of Senate Republicans have no stomach for a fight tying continued government spending to defunding or delaying implementation of the Affordable Care Act. A small number of House GOP moderates have said publicly that they’d support a continuing resolution funding the entire government.
In the face of this disarray, Reid has so far found it easy to hold Senate Democrats together to swat back everything the GOP-led House has sent him so far.
Plus, now that the government is already shut, it may be too late for such legislative maneuvers to register on public opinion as a whole.
It’s possible that the piecemeal strategy will give Republican strategists ammunition to use against individual House or Senate lawmakers in 2014. (“Your Democratic congressman voted to deny health care to veterans!”) But Republicans' larger problem at this moment is that they need to direct more of the blame for the current state of affairs to the White House and Democrats as a whole, according to polls.
In that context, the mini-bills may be too little, too late: clever but arcane tactics undertaken at a point when a news tsunami about the shutdown and its effects will overshadow them.
“It’s very possible public perceptions of a protracted standoff will be shaped less by details of the budget debate and more by already existing perceptions of which side is more committed to constructive governing,” writes left-leaning pundit Greg Sargent on his "Plum Line" blog at The Washington Post.
The Government Shutdown of 2013 is on. A congressional dispute over whether Obamacare should be defunded or delayed as a condition of continued government funding has forced some 800,000 federal workers off the job. One by one Washington agencies are turning off the lights, rolling down their shades, and shutting the doors.
How long will they be closed? How long will the shutdown last?
No one can answer those questions with complete assurance. But taking past such confrontations into account, the conventional wisdom is that the shutdown either ends very quickly or will stretch at least seven days.
“Feels like if there isn’t a resolution today, then we’re probably looking at a shutdown thru the week, possibly merging w/debt ceiling 10/17,” tweeted NBC White House correspondent Chuck Todd on Tuesday morning.
The quick-end scenario depends crucially on House Speaker John Boehner’s intentions. If all he meant to do was placate tea party conservatives by forcing the Obamacare dispute just past the point of a government shutdown, proving he’d stand with them longer than many pundits had predicted, well then, mission accomplished.
Indeed, some House Republicans on Tuesday said it was time for Speaker Boehner to fold. Rep. Scott Rigell (R) of Virginia tweeted, “We fought the good fight. Time for a clean CR,” meaning time for a funding bill without any provision that would alter the Affordable Care Act.
As of midday Tuesday, hope for a quick end to the dispute was fading, however. Tempers still seemed hot and rhetoric was pointed. The Democratic-controlled Senate rejected the House demand for a conference committee to discuss terms of continued government funding. In response, prospective House conferees held a photo-op that consisted of them sitting across from some empty chairs. “That’s not how adults operate,” said President Obama of House Republicans during a midday Rose Garden appearance.
The last time the government shut down, things began with a five-day federal work interruption in November 1995, followed by shutdown that stretched from Dec. 16, 1995, to Jan. 6, 1996.
Considering that experience, the current shutdown could stretch for some time.
“I’m projecting that the shutdown will last at least a week because it will take that long for the impact of the shutdown to start to be felt and, therefore, to make ending it more politically acceptable,” writes Stan Collender, a veteran federal budget expert and Qorvis Communications executive, on his "Capital Gains and Games" blog.
Federal agencies won’t be fully shuttered until the middle of the week, says Mr. Collender, who as a congressional staffer helped write the laws governing the modern congressional budget process. Voter frustration at lack of government services won’t hit until week’s end. Then it will abate a bit on Saturday and Sunday.
On Monday voters will face the full reality: They can’t apply for a passport, camp at Yellowstone, get an answer to a Medicare question, or – crucially – get paid if they are a government contractor.
“This is the point at which there will start to be real pressure on members of Congress as the impact of the shutdown finally hits home for many people and the prospect of lost wages and less business becomes a reality,” writes Collender.
Meanwhile, right-leaning Weekly Standard editor William Kristol was urging House Republicans to stand pat for at least a week, and possibly until Oct. 17, when Congress will have to raise the debt ceiling if the US is to pay debts already incurred.
Mr. Kristol compared the current US political situation with a game of blackjack. House Republicans “have a hand they could easily make worse by panicking, and which could be good enough for a win or draw if they keep calm.”
Boehner should send members home to their districts for a few days to get them out of the Washington bubble and hear the voices of their constituents, who may feel few effects of the shutdown, according to Kristol. Meanwhile, Boehner and the rest of the GOP leadership should start to think about how they’ll play their cards in the coming debt ceiling fight.
Many economists believe a standoff on the debt ceiling that leads to inaction would damage the US economy much more than a government shutdown. That’s because the prospect of Uncle Sam reneging on his debt might cause international financial markets to freak out, perhaps spiking interest rates.
In his Rose Garden appearance Tuesday, Mr. Obama said he would have more to say about a possible breach of the debt ceiling in the days ahead.
“It would be far more dangerous than a government shutdown, as bad as a shutdown is,” said Obama.
If the government shuts down at midnight Monday – as now seems likely – the effects on the US economy and political system could be profound. In fact, 2013 might be the most consequential shutdown ever, surpassing the impact of the Bill Clinton/Newt Gingrich standoffs of 1995 and 1996.
For one thing, the economy today is much softer than it was in the mid-1990s. Back in ’95, the Federal Reserve’s biggest worry was that the go-go years had gone too far and the economy was in danger of overheating, resulting in an inflation spike. So the Fed hiked interest rates, cooling things down at the end of year.
That produced a “soft landing” from which growth of US gross domestic product took off in ’96. GDP growth was 4.7 percent for the second quarter, after the brief shutdown period was over. Overall GDP growth for the year was about 3 percent, and unemployment fell to 5.4 percent.
Nowadays, the jobs picture is much bleaker. Unemployment is 7.3 percent as the economy continues to struggle to recover from the Great Recession. Second quarter GDP growth was 2 percent, and economists are predicting a 2013 GDP rise of 1.5 percent, or a bit higher.
So a shutdown this time would hit an economy that’s easier to push off its feet. For each week the government is closed, fourth quarter GDP would shrink by 0.2 percent, according to Nariman Behravesh, chief economist at IHS/Global Insight in Lexington, Mass. A lengthy two-month shutdown would probably push the United States back into a recession, according to Moody’s Analytics chief economist Mark Zandi.
Second, a government shutdown might reshape the modern Republican Party. That’s because the ongoing political struggle over how to fund the US government and whether to defund or delay Obamacare is a very untraditional political battle. It has the usual component of a Republican versus Democrat fight, but the more important front may be Republican versus Republican, as tea party conservatives push for a confrontation that establishment Republicans don’t appear to want.
The question is how far House Speaker John Boehner will go in adhering to tea party preferences. To this point, he has shown willingness to back down in the face of opposition from his conservative wing. He would have preferred a clean funding bill to keep the government open, but instead has brought to the House floor versions of the bill that would defund or delay Obamacare, ensuring their doom in the Senate.
Unlike previous speakers, Representative Boehner does not appear to believe that making the government work is part of his job description if doing so conflicts with the will of his conference, writes Caitlin Huey-Burns at RealClearPolitics.
“One thing has become clear over the past three years of divided government and so-called crisis governing: As speaker, Boehner is changing the definition of a representative government,” she writes.
A third and related point is that the impending government shutdown, if it occurs, could reflect a change in the role of political minorities in the US legislative process.
We’re defining “minority” here in the context of the branches of the US government. The GOP controls the House, while Democrats have the Senate and White House.
As Democrats point out, House Republicans are now attempting to reverse or slow a law (the Affordable Care Act) that was duly passed by majorities of both chambers of Congress and signed by President Obama in 2010. The House GOP has linked its effort to the must-pass omnibus spending bill in an attempt to overcome the fact that the other side has more votes, in the sense that the Senate and White House count as two to the GOP’s one.
Provoking a fight that could lead to a government shutdown over a law that’s not directly related to the bill at hand is an escalation of Mr. Gingrich’s 1995 tactics. Gingrich and President Clinton were (mostly) fighting over the levels of spending in the government funding bill itself.
Will this set a precedent for future conflicts where one congressional chamber wants to do something that the other chamber and the president reject? That will depend crucially on the outcome of the current partisan standoff, of course. And for Democrats who think only tea party adherents would push things this far, consider this thought experiment: Would their party not fight as hard to defend Obamacare as conservative Republicans are fighting to repeal it?
The atmosphere in Washington is now so poisonous that the Senate chaplain opened Friday’s session with a prayer that in essence called for a higher power to step in and end ongoing partisan fiscal strife.
“Keep us from shackling ourselves with the chains of dysfunction.... Lord, deliver us from governing by crisis, empowering us to be responsible stewards of your bounty,” said Chaplain Barry C. Black.
That may yet come to fruition. In the meantime, disputes between the conservative and establishment wings of the Republican Party and between the GOP-controlled House and Democratic-controlled Senate remained so intense that governing by crisis appeared a likely possibility.
This is not a budget-battle-as-usual. Washington is currently engaged in “a high-stakes showdown that is playing out in a climate of chaos, infighting and unpredictability that is extraordinary even by congressional standards,” according to Alan Fram of the Associated Press.
That’s led some commentators to opine that it’s time for Washington to just go over the ledge, already. Get it over with. Shut down the government or breach the debt ceiling. Like Sherlock Holmes and his archenemy Professor Moriarty, perhaps the two parties should close for a final struggle and plunge over Reichenbach Falls.
“With apologies to Nike, maybe it’s time ... to stop threatening and ‘just do it,’ ” writes Todd S. Purdum in Politico Friday.
Purdum was referring to House Republicans in particular. They’ve engaged in brinkmanship by making the defunding of Obamacare the price of funding the government past Sept. 30, in this view.
But the Senate on Friday rejected that linkage, voting along party lines to strip the legislation of the Obamacare defunding clause and send it back to the House. House GOP leaders appear uncertain how to proceed.
If Speaker John Boehner stands his ground, a government shutdown is probable, if not certain. The dire fiscal and political effects of this might “break the fever” and give Boehner more leverage over the conservatives in his caucus who are insisting on the defund-Obamacare provision.
Or you can take the other side – it’s the Democrats whose fever might break. A shuttered government and plunging stock market might convince President Obama to move off his maximalist position and agree to delay, cuts, or other changes in his signature domestic health law.
In both cases the point is that the shock of a bad scenario might clarify the situation and ensure that this fiscal standoff won’t be repeated in months and years ahead.
“Mightn’t it be better to let the crash happen, if only so the reconstruction can start?” writes Purdum.
Others argue that a shutdown of the government Oct. 1 would be a small price to pay if it convinces Congress to raise the debt ceiling later in the month.
Boehner and other House GOP leaders would prefer a debt ceiling showdown, in large part because they believe it is an issue on which they have more leverage. Shutting down the government by not approving a spending bill would be unpopular with voters, according to polls. But raising the debt ceiling? Polls show voters generally agree that should be tied to debt reduction.
The problem is that many economists think breaching the debt ceiling would be much, much worse for the economy than shutting down the government. It likely would result in the US reneging on debts already incurred, which might freak out world financial markets.
Thus it would be bad if Boehner succeeds in getting his caucus to focus on the debt ceiling, write Ezra Klein and Evan Soltas on the Washington Post’s Wonkblog. Conservatives would be even more likely to focus on confrontation since they might feel they had not stood up and fought on the continuing resolution authorizing government spending.
“Accepting a [government] shutdown for a much lower likelihood of a debt-ceiling breach might be a good trade,” they write.
Then there are those who think even a debt default would be a good thing if it means neither party would ever again use a debt ceiling vote as a means to try and extract concessions from the White House.
Though it would be better for the House GOP to just go ahead and agree to raise the debt ceiling, for President Obama the “next best option is to refuse to negotiate the debt ceiling, allow default, and never have to go through it again. Bargaining merely postpones, and worsens, the next default crisis,” writes Jonathan Chait of New York Magazine.
Given the mood in Washington it’s unfortunate but true that it is likely the US will find out if any of these theories are correct.
House Speaker John Boehner said Thursday he would agree to raise the nation’s debt ceiling before the federal government hits its credit limit on Oct. 17, but only if Democrats agree to delay implementation of Obamacare for one year.
Though still in the formative stage, the House GOP’s debt bill right now would also authorize construction of the Keystone XL oil pipeline, permit more energy exploration on federal lands, block federal regulation of greenhouse gas emissions, establish a timeline for comprehensive tax reform, limit medical malpractice suits, and raise the cost of Medicare for wealthier Americans.
“We’re going to introduce a plan that ties important spending cuts and pro-growth reforms to a debt limit increase,” said Speaker Boehner at a press conference with GOP leaders.
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Remember, the debt limit is a separate issue from the government spending bill that’s now in the Senate and is about to be pinged back to the House, shorn of a provision that would defund the Affordable Care Act (aka Obamacare) for good.
The spending bill would authorize appropriations to keep the government open. It’s not yet clear whether Congress will be able to pass such legislation before the US fiscal year ends at midnight Monday.
The debt limit bill would allow the feds to continue borrowing money to pay for government spending that Congress has already approved, as well as for future outlays.
The debt ceiling is in fact the more important deadline, according to many economists. They worry that financial markets would freak out if the US appeared close to reneging on incurred debts.
But Boehner has tried to get his GOP caucus to make its stand on the debt bill, not the spending one, in large part because he believes it is an issue on which Republicans have more leverage. Shutting down the government by not approving a spending bill would be unpopular with voters, according to polls. But raising the debt ceiling? That’s something on which voters generally agree with the GOP position.
For instance, a just-released Bloomberg poll found that 61 percent of respondents agreed that “because Congress lacks discipline on spending ... it is right to require spending cuts when the debt ceiling is raised even if it risks default.”
Given that, will Democrats be willing to go along with Boehner’s yet-to-be-unveiled debt bill?
As you might imagine, right now the answer is “no,” particularly given the number of items Boehner appears willing to attach to the debt legislation.
“The more the list of demands grows, the less likely it is that Obama and Dems will ever agree to negotiate over any of this,” writes left-leaning pundit Greg Sargent at his "Plum Line" blog at the Washington Post.
The White House has consistently rejected the notion of negotiations over the debt ceiling, saying it is up to Congress to live up to its constitutional duty to pay the bills it has approved. On Thursday President Obama personally singled out the issue of a possible one-year delay in Obamacare, saying he would not accept any delay in the program’s taxes, mandates, or benefits in exchange for a debt ceiling hike.
“The closer we’ve gotten to the [Oct. 1 Obamacare implementation] date, the more irresponsible people opposed to this law have become,” said Mr. Obama at an appearance at a community college in Largo, Md.
Yet opposition to Obamacare is one of the few things that unifies Boehner’s fractious GOP caucus. With defunding dead, House Republicans are turning to smaller steps, such as the one-year delay or repeal of an Obamacare tax on medical devices, in an effort to limit a health law they insist is bad for the nation.
How will these positions be reconciled? That’s the $64,000 irresistible-force-versus-immovable-object question.
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