Bring On the Shutdown—Better Sooner Than Later

Commentary about business and finance.
Sept. 23 2013 11:45 PM

Bring It On

A government shutdown over Obamacare would be annoying, but the alternative is worse. 

A picture of U.S. Senator Ted Cruz is surrounded by small U.S. flags at a booth at the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, March 15, 2013.,USA-REPUBLICANS/CPAC
Sen. Ted Cruz is threatening to shut down the government over Obamacare. We should let him.

Photo by Jonathan Ernst/Reuters,© Jonathan Ernst / Reuters

According to the conventions of Washington, D.C. journalism, political agreement is always better than disagreement, and the passage of laws is always better than their nonpassage. Though neutral reporters studiously avoid taking sides on the merits of the Affordable Care Act, they make it clear that if Sen. Ted Cruz (R-Texas) gets his way and provokes a government shutdown over Obamacare on Oct. 1, Washington will have failed. This is nonsense. At this point, the mostly likely outcome is that Cruz will back down or be defeated, and that John Boehner and his House Republican colleagues will agree to a stopgap government-funding measure that keeps the Affordable Care Act in place.

But I’m rooting for the opposite, and you should be, too. A little government shutdown isn’t the worst thing in the world, and it’s much better to have this fight now rather than entertain months of herky-jerky crisis.

Of course, there is an even better option. If Republicans wanted to, they could stop acting so crazy. They could let Obamacare get rolled out over the next several years, and then try to repeal it (or not) by winning the 2016 presidential election. They could abolish the insane statutory debt ceiling, and show some leadership by coming to the table with a serious budget bargain.

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That’s not going to happen. And as long as the GOP insists on being dogmatic and unreasonable, we might as well have the crisis sooner rather than later. The Republican establishment’s complaint against Cruz is they think the shutdown strategy won’t work. Obamacare’s funding is “entitlement” spending like Social Security or Medicare, so the program will continue even in the face of a government shutdown. Day-to-day services will vanish, inconveniencing people, and the voters will blame Republicans. So GOP leaders aren’t happy that conservative activists have pushed them into picking this fight. But the leadership’s alternative strategy is to create an even worse situation.

Boehner and other GOP leaders would like the defunding crusade to be put aside for the moment, in favor of a new continuing resolution that will keep the government open for another month or two. In this scenario, we’ll reach the statutory debt limit before the government shuts down due to lack of funds. Boehner claims—and has consistently claimed for a long time—that he won’t agree to raise the debt ceiling unless Obama makes significant concessions in exchange. Obama, sensibly, insists that he won’t do this. Raising the debt ceiling is necessary to avoid a constitutional crisis and potentially a financial crisis as well. It shouldn’t be the subject for give and take.

Most observers think that when push comes to shove, Boehner will surrender on this, too. That’s what happened when Obama took a hard line last time around. But you never know when you have a bunch of politicians with their backs up against the wall swearing they’ll hold the line. So not only do we need to worry that a debt ceiling breach might occur, we can be sure that the mere existence of worry will weigh on the economy.

By contrast, the negative consequences of a government shutdown would be relatively minor. One doesn’t want to overstate this case too much. If you were planning a visit to a national park, then a shutdown could ruin your vacation. If you’re applying for disability benefits, then every day of unnecessary delay could be excruciating. Federal employees themselves will be faced with financial uncertainty. But in general, a day or two or three or even a week without the operation of the federal bureaucracy is more an annoyance than a disaster. Having federal regulatory agencies shut down on a permanent basis would obviously be catastrophic. But a brief vacation is eminently survivable.

And while it drags on, it could offer us a valuable opportunity to hash everything out in one big go. The shutdown-or-defund strategy does terribly in polls, suggesting that Republicans would have to cave soon enough. And Obama could demand that the appropriation measure also include authorization to do the borrowing necessary to finance the spending that Congress has agreed to. That wouldn’t cure Washington gridlock, but it would put us on a smooth, no-crisis path through the next election. If Democrats and Republicans can’t agree on much, they could at least agree to disagree and revisit these arguments after people vote.

By contrast, if we avoid a shutdown, we’ll have simply teed ourselves up for another crisis a few weeks later, and then for another appropriations lapse when whatever stopgap measure Congress gins up expires. It’ll be a mess. If Republicans are determined to have a giant fight over Obamacare, despite Democrats controlling the White House and the Senate, the time for it is next week. Bring on the shutdown.

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