Government Shutdown 2013: Still a Terrible Idea

Around a third of House Republicans, many Tea Party-backed, sent a letter last week calling on Speaker John Boehner to reject any spending bills that include implementation of the Affordable Care Act, otherwise known as Obamacare. Some Senate Republicans echo their House colleagues in pondering this extreme tactic, which is nothing other than a threat of government shutdown as neither congressional Democrats nor President Obama would ever agree on a budget that abolishes the new health care law. Unleashing this threat would amount to holding a large number of of the federal government's functions, including processing Social Security checks and running the Centers for Disease Control, hostage in order to score partisan points. It would be an irresponsible move inflicting enormous damage to the U.S. economy while providing no benefit whatsoever for the country, and Boehner is rightly disinclined to pursue it. 

Government shutdowns are deleterious to the economy. Two years ago in February 2011, a similar government shutdown was looming due to a budget impasse, and a research firm estimated that quater's GDP growth would be reduced by 0.2 percentage points if the shutdown lasted a week. After the budget is restored from the hypothetical shutdown, growth would only be "partially recouped," and a longer shutdown would result in deeper slowdowns. Further, the uncertainties resulting from a shutdown would also discourage business. A shutdown was avoided last-minute that year, unlike in 1995 during the Clinton administration where it actually took place for four weeks and resulted in a 0.5 percentage-point dent in GDP growth. Billions of dollars were cut from the budget, but neither Boehner nor the Republicans at the time were reckless enough to demand cancellation of the entire health care reform enacted a year before.

Besides the economic effects in numbers, a shutdown this year will harm some of the most vulnerable, while at the same time not shutting down government policies that have been the most intrusive upon American people. "Essential services" would continue running, but what the federal government deems "essential" often does not coincide with what we consider essential. In the 1995 shutdown, the cleanup of toxic waste at 609 sites came to a halt. Who knows how many people were affected by the poisonous substances left over unattended?Similarly, health and welfare services for veterans were pulled back as well. Yet, a government shutdown does nothing to stop the operations of Drug Enforcement Administration (DEA), which is considered an "essential service" despite the failed War on Drugs having done much more harm than good. The NSA wiretapping program, which some consider to violate civil liberties, would likely be unaffected, as would the TSA pat-downs.

To force a budget without Obamacare, the signature legislation of the administration, in this manner would be akin to threatening to shut down all government agencies unless Social Security or the EPA is done away with here and now. If during the Bush years in 2006 the Democrats told the president to sign a budget ceasing all military operations in Iraq and Afghanistan or face a shutdown, not only would Bush refuse to comply, Republicans would be calling Democrats traitors to the country. One can in principle support privatization of Social Security or oppose government regulation of health care, but legislating by hostage-taking is inimical to democracy. American people should be worried, additionally, as some Republicans are also considering using the debt ceiling this fall to bring down Obamacare. Not raising the debt ceiling when it is reached can be even more dangerous for us than a government shutdown. As economist Alice Rivlin explained, it would cause the U.S. to default and become a "deadbeat country" like Greece. In the stern words of Austan Goolsbee, such default would be "the first default in history caused purely by insanity."

During the 2011 budget crisis, I was living in D.C., and if a shutdown happened then the garbage collection in the city also was at risk of being halted which would have brought more bad smell around my dorm back. A group of angry D.C. residents planned to bring their trash to Boehner's residence. Will the American people be as enraged this time when the stakes are even higher, as Republicans are saying they would try shutting down the government again with clearly unreasonable demands? The truth is plain and obvious, as Obama said earlier this month: "The idea that you would shut down the government unless you prevent 30 million people from getting health care is a bad idea."