Opinion: In Defense of Shutdown Season
This past weekend, what seemed like an inevitable government shutdown was avoided when (now former) Republican Speaker of the House Kevin McCarthy bucked the hard-liners in his own party to approve a stopgap spending measure that will cover the next 45 days. The legislation failed to include additional funds for Ukraine, but it also had none of the deep safety-net spending cuts many conservatives sought. The result was a compromise, albeit one that cost McCarthy his job, but a compromise nonetheless.
The tense ordeal represented one of only two times in the political cycle when our government’s spending is brought to the forefront of the public’s mind: debt ceiling fights, like the one earlier this year, and when appropriations bills must be passed. Otherwise, both parties are mostly mute on the issue. Republicans advocate for less spending, but the best way to address the issue is the political suicide of tackling the mandatory spending of Social Security and Medicare/Medicaid, so they present only half-baked ideas. Democrats, the party of social welfare, typically support higher budgets, but they want to avoid discussion of our unsustainable deficits.
And those deficits are indeed alarming. We are in the midst of a runaway effect where previous deficits have led to a sizable portion ($400+ billion!) of our budget going toward interest payments, which helps lead toward more budget deficits passed, which means more interest commitments, and so on. Not only does this harm our future generations, but much of this debt is held by foreign investors – especially China. It is a real geopolitical risk to have our greatest global competitor holding leverage over our economy. Further, Northwestern’s own Robert Gordon believes that America’s economic growth potential is significantly hampered by future interest payments. And with the recent rise in interest rates, the impact of these deficits now ripple stronger throughout the economy, scaring Wall Street. By choosing to spend now, we are shooting ourselves in the foot down the line.
So, why don’t we embrace a looming shutdown if it can help us confront this issue? The answer is obvious: on top of bad optics, the effects of a realized shutdown are undoubtedly detrimental to the health of our economy. The Bipartisan Policy Center estimated we would lose around $1 billion every week when some percentage of the 2.2 million employees in the federal workforce would miss paychecks. After a 2019 law that now guarantees back-pay for those furloughed, this downside is at least somewhat mitigated, but shutdowns are unequivocally bad for the country.
The nature of contemporary politics, though, requires crisis to forge compromise. Only when we confronted the outbreak of COVID did Congress quickly pass legislation for stimulus relief. Only when the US risked default did Biden concede policy points like IRS funding and food stamp scale-backs. The shutdown during the Clinton administration resulted in balanced budgets. It’s the sad truth that a government shutdown, or the threat of one, may be the only way to balance our books and solve the long-term stresses of continuous deficits.
We had one compromise on spending this shutdown season. Let’s hope for another in 45 days.
"Lincoln Memorial: Closed Due to Government Shutdown" by NPCA Photos is licensed under CC BY-ND 2.0.