Shutdown

By Stephen D. Foster Jr.

Government shutdown. Not something the American public wants to hear right now, but that’s not stopping Republicans from threatening just such a move. In their quest to slash hundreds of billions of dollars from the federal budget this year, Republicans are keen to play a game of chicken with President Obama until one party blinks. In their budget, Republicans are proposing cuts to health care, education, environmental controls, research, technology, transportation, and Social Security. All of these cuts are from programs and departments that have strong support from Democrats who are expected to oppose the proposed destruction of these infrastructure and social programs. Republicans are countering Democrats by threatening a shutdown of the federal government, a failed strategy that backfired on them once before.

The last time the federal government shutdown was in 1995 and 1996. Much like today, Democrats controlled the White House and Republicans controlled the House of Representatives. Newt Gingrich held the gavel as Speaker of The House, while Bill Clinton was the President. When Republicans captured Congress in the 1994 midterm election, they did so by signing a Contract With America that included budget cuts. Those budget cuts included cuts to Medicare, Medicaid, environmental controls, and education which is identical to the cuts Republicans are pushing for today. Zealously opposed to Democrat supported programs, the Republicans were determined to force President Clinton to accept the budget, and if he didn’t, they intended to shut the government down until he gave in to their demands.

When Bill Clinton received the budget proposal, he rejected it on the grounds that it would hurt the economy and the millions of people who needed these programs. Outraged, the Republicans went through with their threat and shut down the federal government. Republicans then went into spin mode, blaming the shutdown on the Democrats and vice versa, although only Congress has the power to shut down the government. Republicans believed that the people were on their side and that the consequences wouldn’t matter much if they got their way. But Republicans were wrong on both counts.

As a result of the stalemate, federal workers were furloughed and the government lost an estimated $800 million dollars. Veterans benefits were slashed. Health research and toxic waste cleanup was suspended. 400 border patrol agents that were due to be hired weren’t hired. 200,000 visa applications went unprocessed and National Parks, museums and national monuments were closed down. Republicans were gaining enemies. Even the business community hated the shutdown. Many businesses around federal facilities lost money and there was nobody around to sign checks, review and approve invoices, and sign contracts. As a result, Republicans hurt many businesses and contractors. By shutting down the government, Newt Gingrich and Republicans also hurt the United States among the international community. Republicans refused to raise the debt ceiling which increased the limit of debt that the Treasury Department is authorized to accrue. As a result of not raising this ceiling, the United States defaulted on its debts. Investors lost confidence and interest rates increased which increased the cost of borrowing money. As the shutdown continued, many Americans felt the strain.

The shutdown would end on January 6, 1996 but the Republicans were the ones punished for it as the American people saw them as arrogant cry babies having temper tantrums and viewed Bill Clinton as the grown up in the room who defended the middle class. As a result, Republicans would lose seats in the 1996 election and subsequent elections in 1998 and 2000. Bill Clinton would also go on to win re-election later that year as well.

In the present day, Republicans are once again threatening to shut down the government in an effort to force Obama into agreeing with everything they want. But Republicans are playing with fire as we move closer to March. At that time, Republicans will have to make a decision. They will either shut the government down as we are just pulling ourselves out of recession in the midst of a grim job outlook or they will stop playing their petty games designed to sabotage President Obama. The United States cannot sustain another government standstill. Refusing to raise the debt ceiling would be absolutely disastrous. Interest rates would skyrocket at a critical juncture in our economic recovery, causing banks to lose confidence which could drive down the stock market and lead to credit crises among businesses across the country. But that’s not all. If the United States defaults on its debt payments, our interest payments will go up. We already pay approximately 500 billion dollars a year in interest payments on the national debt. We do not need a higher rate at this time. Moody’s Investor Service is already close to lowering the US credit rating. Defaulting on the debt would certainly force them to do so. At that point, countries could very well refuse to loan any money to this country. But it gets worse than that.

If investors lose confidence in the economy at a time when we are just lifting ourselves out of recession and the unemployment numbers are showing improvement, we can expect a double dip recession and even worse unemployment numbers. And even if the spending bill were signed by President Obama, the cuts in the areas the Republicans have proposed would slam the middle class as seniors would lose much of their Social Security and Medicare benefits and the rest of us would lose Medicaid. Many research, development, transportation, environmental, and health care jobs would be lost. If you think the unemployment rate is high now, just wait until Republicans shut the government down or get the cuts they want. And if you think its hard to find a job now, it will get worse as more and more people have to search and compete for the few jobs that will be offered as a result of investors not being confident in the economy, which would result in less expansion.

And that’s still not all. Not only are Republicans intent on cutting spending, but those cuts would also kill the Affordable Care Act and reverse Wall Street reform, putting us back in the exact position we were in before Obama took office. By killing health care reform, Republicans would once again allow insurance companies to drop people for getting sick, and allow them to deny people coverage because of a pre-existing condition. Kids would also no longer be allowed to stay on their parents insurance till the age of 26, leaving millions of college students without coverage. By killing Wall Street Reform, Republicans would allow Wall Street to resume doing the irresponsible speculating and betting that led to the 2008 recession. In other words: catastrophe.

Basically, Republicans would screw themselves either direction they go. If they shut the government down, they will come off as arrogant saboteurs of the Obama Administration who value petty political revenge over the American middle class and economic recovery. And if they get exactly what they want, they still anger a middle class that is beginning to enjoy the benefits of health care reform and a middle class that expects Wall Street to play by the rules of fairness and responsibility. Either way, Republicans could suffer heavy losses in 2012. Obama is on the ticket and the field of Republican challengers is weak. The Tea Party will not be as inspired to vote this time around and college students and minorities will flock to the voting booth to fire a Republican Party that is more concerned with political victory than American victory. Jobs are being ignored in Congress by Republicans who campaigned on jobs. And those job numbers and the economy will get substantially worse no matter what the Republicans do. Republicans must raise the debt ceiling so that the United States can meet its obligations. Defaulting on our debt would destroy our credit and reputation thus crippling our economy again. Likewise, putting forward the spending cuts Republicans intend to offer is even more irresponsible. The American business sector has been ecstatic about President Obama’s investment proposals in the areas of energy, environment, science, technology, transportation, and education. Republican spending cuts would prevent all of that, thus hurting our ability to be innovative, intelligent, and competitive which would hold us back behind the rest of the world and harm our economy in the future. The business sector could most certainly turn on Republicans if that were to happen. So again, either way, businesses wouldn’t be too happy.

Republicans are between a rock and a hard place. They can play to their hardcore base and shut government down, or they can play ball with the president and score major points among independents and moderates. Because President Obama will not approve the spending cuts the Republicans offer. But I foresee the Republicans doing the former. They will shut the government down like they did in 1995 and be seen as arrogant jackasses that hate the middle class and it will cost them at the ballot box come 2012. If Republicans weren’t so busy rewriting history, they would know that what they want is not what the American people want and that shutting the government down is not what Americans want either. All President Obama needs to do is look them in the eye, reject their draconian cuts on behalf of the middle class and dare them to shut it down. It is often observed that history repeats itself. Well, as a historian, I can confirm that it has many times before and right now, President Obama and Democrats have history on their side.