AMERICA:Even if a shutdown is averted on March 4th, this crisis is built to last, with the national debt likely to reach the $14.294 trillion ceiling
THE COMING week will see a nail-biting, down-to-the-wire game of chicken between Democrats and Republicans over spending, with the shutdown of the federal government next Saturday a real possibility.
Federal agencies this week began drawing up contingency plans for a shutdown, which would be the first in 15 years. Contractors are pressing government agencies to pay bills while there’s still money. As the countdown to midnight March 4th advances, the sense of doom burgeons.
Congress does this sort of political theatre like nobody else does. It’s like waiting for a meteor to crash into a population centre, or the millennium bug to zap your computer. It may not happen, and even if it does, it probably won’t be that bad. But it sounds ominous in the meantime.
The right-wing Tea Party are the only ones cheer-leading for a shutdown, the realisation of their dream of slaying the government dragon.
“People should be careful about, you know, being too loose in terms of talking about a government shutdown because this is not an abstraction,” Barack Obama warned. “You know, people don’t get their social security checks. They don’t get their veterans’ payments. Basic functions shut down.”
The Washington Post yesterday published recollections of the last two shutdowns, under the Clinton administration. Patricia Kennedy, who works for the department of the interior, said the hardest thing for her was “uncertainty of when we would be allowed to go back to work, uncertainty about whether or not we were going to get paid . . .” Kennedy felt hurt when people told her to “relax and enjoy [her] paid vacation at the taxpayer’s expense”.
Mike Greenberg, who was then a senior manager at the social security administration, recalled the “disastrous effect on employee morale” for workers like himself who were judged to be “non-essential”.
Between December 15th, 1995 and January 6th, 1996 – the longest government shutdown in US history – 284,000 federal employees were sent home. Some veterans missed benefits cheques. New applicants could not file for social security. The state department stopped issuing visas and passports. National parks and museums closed.
Guidelines say that federal programmes must continue if there is “a reasonable and articulable connection between the function to be performed and the safety of human life or the protection of property”. The war in Afghanistan will continue. So will tax collection. Air traffic controllers and security personnel at airports will report for duty. The post office is self-funding, so will deliver mail.
But a shutdown would signify that lawmakers in the world’s self-proclaimed oldest democracy were not capable of reaching agreement on the budget they were supposed to pass last year. One sensible proposal would curtail the salaries of the president and Congress for the duration of a shutdown.
The government has been funded for months by “continuing resolutions” – stop-gap measures – because the parties can’t agree. In the early hours of February 19th, the Republican House passed a continuing resolution that would cut $61 billion from government programmes between now and September. The Democratic Senate won’t sign off on the resolution, and President Obama would veto it if they did. So Republicans have offered a resolution that would keep the government running two extra weeks, with a $4 billion cut.
The spokesman for the Senate majority leader Harry Reid said the “so-called compromise” was “nothing more than the same extreme package the House already handed the Senate, just with a different bow . . . a two-week version of the reckless measure the House passed last weekend.”
The Republican Speaker of the House Newt Gingrich was blamed for the Clinton-era shutdowns, and the present Speaker, John Boehner, wants the Democrats to take the fall this time. “We have some Democrats here in Capitol Hill threatening to shut down the government, rather than to cut spending and to follow the will of the American people,” he said.
A Gallup poll showed that 62 per cent of respondents thought the Republican Bill was about right, or wanted still more severe cuts. But the same poll showed that 60 per cent of Americans want legislators to reach a compromise to avoid a shutdown.
Democrats were encouraged by a study by the investment bank Goldman Sachs, which said the Republicans’ $61 billion in budget cuts would shave between 1.5 and 2 percentage points off economic growth in the second and third quarters. “This analysis puts a dagger through the heart of their ‘cut-and-grow’ fantasy,” said the Democratic senator Charles Schumer.
Even if a shutdown is averted on March 4th, this crisis is built to last. The national debt is likely to reach the $14.294 trillion ceiling imposed by Congress around April 5th. Republicans say they won’t raise the ceiling – as has happened 12 times since 1995. That’s shaping up to be the next big battle and the US government’s credit rating hangs in the balance.
