Pete Souza



Washington Politics: Possibility of a Government Shutdown Looms

Republicans and Democrats have forgotten the adage “politics is the art of compromise” or as Economist Donald Wittman observed, “That is what good politicians do: create coalitions and find acceptable compromises.”

President Obama and his liberal base have refused to accept across the board cuts to Democratic policy priorities and the Tea Party Caucus in the House has refused or made it increasingly difficult for Speaker Boehner to compromise with Democrats. The middle ground has proven to be increasingly elusive.

Because President Obama, Senate Majority Leader Harry Reid and House Speaker John Boehner failed to reach a compromise during a White House meeting on March 5th over how to fund the government for the next six months, a government shutdown is likely. A shutdown means that except for essential services, government services will cease operations and/or face noticeable delays. The current disagreement over funding the government for the next six months is an appetizer for the coming debate when an agreement will have to be reached in order to pass the FY2012 federal budget. However, Americans do not face an apocalyptic landscape if a shutdown occurs.

While rare and politically toxic a government shutdown has occurred sixteen times since 1977. It is likely that Social Security checks will be written and Medicare and Medicaid payments will be made. The last shutdown under President Clinton and Speaker New Gingrich resulted in delayed GI Bill payments and new applications for Medicare and Medicaid were not processed.

Although shutdowns typically last only a few days, many remember the infamous shutdown that resulted over disagreements to balance the federal budget between Speaker Gingrich and President Clinton. That shutdown ran from December 16, 1995 to January 6, 1996 and resulted in a furlough of nearly one million federal workers, hundreds of national parks were closed along with museums and national monuments and other government functions were suspended or reduced significantly.

Besides direct losses of revenues to the national parks, the shutdown had wide ranging economic ramifications like a loss of tourism revenues and the airline industry lost millions of dollars. In 1997, Roy T. Meyers wrote, “A quick and dirty OMB [Office of Management and Budget] analysis, dated January 19, 1996, calculated the cost of the two long shutdowns at more than $1.4 billion, most of which was for back pay granted to furloughed workers. In other words, the ‘cost’ was what the government paid for the outputs it largely did not get on time.”

While Clinton and Gingrich shared mutual blame for the shutdown, Clinton was able to persuasively argue that House Speaker Gingrich shared more of the blame. In an effort to argue that Speaker Gingrich was responsible for the shutdown President Clinton went on a public relations offensive that had a noticeable affect on public perception about who was to blame. Following the 1990s shutdown, President Clinton’s argument, much like President Obama’s, is that conservative Republicans were pursuing draconian cuts to education, the EPA and Medicare funding.

As a result of the 2010 midterm election, many House members are convinced that their assuming control of the House was a referendum on reversing the country’s direction and undoing many of the president’s policy initiatives including consumer advocacy, banking reform and “ObamaCare.”

Presently, conservative Republicans and members of the Tea Party Caucus have added socially driven policy riders onto budgetary bills. These policy riders eliminate funding for Planned Parenthood, funding for the arts including PBS and NPR and stops the EPA from pursuing environmental regulations. Many of these policy areas are favored by the Democrats and Sen. Reid and other Democrats have insisted that these issue areas have no place in a budget battle.

Sen. Reid told reporters in a conference call, “We are going to have a full discussion on the riders. We have said time and time again that riders that are ridiculous in nature — and most of them are — have no chance of surviving.” Speaker Boehner has had to thread a needle in trying to placate conservative Republicans in the House and simultaneously negotiate with a Democratic controlled Senate and White House.

As a result of the impasse over negotiations, Obama, Boehner and Reid are pursuing a compromise to avoid a shutdown. While an agreement failed at the White House on Tuesday, Boehner and Reid have continued negotiating in order to reach a compromise on the amount of cuts that are acceptable. Essentially, the impasse has its roots in the dollar amount of the cuts that are advocated by the Tea Party Caucus and other conservative House members regardless of what the Senate will accept.

For the past week Senate and House negotiators had been working towards $33 billion in cuts but recently Speaker Boehner balked and openly suggested that he had never previously agreed to that number. Boehner has stated that he would be amendable to $40 billion, which would be a significant step towards reaching a budget deal. Previously, Boehner has been noncommittal on an exact number. The speaker’s spokesman reiterated, “The speaker has told Senate Democrats, the President, and the American people that he will fight for the largest possible spending cuts to help end some of the uncertainty that is making it harder to create American jobs.”

The $40 billion in cuts suggests that a negotiated settlement can be reached. If Reid and Boehner are still unable to reach a deal shortly, President Obama has openly vowed to invite both men back to White House until a deal can be reached. According to a newly engaged Obama, “I will invite the same folks that we invited today…And if that doesn’t work, we’ll invite them again the day after that. And I will have my entire team available to work through the details of getting a deal done.”

The White House’s position is that an agreement should have already been reached because weeks have been spent negotiating spending cuts on an insignificant amount of the federal budget and the cuts will not make a significant impact on the federal deficit. The president’s assertion is that once an agreement is reached over funding and a shutdown is averted the real negotiations can begin over the FY2012 federal budget and more contentious items like Medicare, Medicaid and Social Security. President Obama, in comments to the White House Press Corps on March 5th, suggested that by passing a negotiated settlement work could begin on next year’s budget.

The president suggested to reporters at the White House, “Now, we’ll have time to have a long discussion about next year’s budget, as well as the long-term debt and deficit issues, where we’re going to have some very tough negotiations. And there are going to be I think very sharply contrasting visions in terms of where we should move the country. That’s a legitimate debate to have. By the way, part of the reason that debate is doing to be important is because that’s where 88 percent of the budget is. What we’re spending weeks and weeks and weeks arguing about is actually only 12 percent of the budget, and is not going to significantly dent the deficit or the debt. So I’m looking forward to having that conversation.”

While a settlement has yet to be reached the political perils of a shutdown have encouraged all sides to arrive at an agreement. The 1990’s budget battles between Clinton and Gingrich offer lessons to Boehner, Obama and Reid. While Clinton ultimately prevailed in public opinion this was only after Gingrich openly flouted the idea that he was willing to see the government shutdown and he publicly expressed his unhappiness at being seated towards the back of Air Force One.

For Boehner, the risks are obvious and he has expressed his concerns to fellow lawmakers. Boehner told his colleagues during a closed-door meeting, “The Democrats think they benefit from a government shutdown. I agree.” Rep. Steve LaTourette (R-OH) agreed with the speaker’s assessment when he told Politico, “My view is that a government shutdown doesn’t benefit anyone necessarily, but if one party or the other is going to get an edge, it’s probably the Democrats. I agree with the speaker there…If you look at the government shutdown of 1995, it guaranteed President Clinton’s reelection. And that’s what this would do. If you want to cede the presidential race in 2012, you shut down the government.”

For Boehner finding a compromise has many ancillary benefits. By negotiating with Obama and Reid in good faith the stage will be set for less contentious negotiations over the 2012 federal budget. However, by negotiating with Democrats, Boehner risks alienating the Tea Party Caucus and losing their votes on any potential deal.

Sen. Reid has the most to lose from a shutdown. His caucus holds a smaller majority than before the 2010 midterm election and with 2012 looming he cannot risk giving the RNC ammunition to use in campaigns against Democrats running for reelection.

In the next day or two, Reid, Boehner and Obama will, in all likelihood, hammer out an agreement. Once an agreement is reached then the more difficult negotiations will need to begin on the real drivers of the federal budget deficit; Medicare, Medicaid, tax policy and defense spending. If a budget deal is not reached now there will be collateral damage. It remains to be seen whom the public will hold accountable.