Commentary

Five Lessons from the Shutdown

Greece is now suffering through a very deep recession, with record unemployment and unimaginably harsh economic conditions. To make matters worse, there’s not much light at the end of the tunnel.

The debt burden is larger today than when the crisis started, notwithstanding years of austerity. Or, since politicians have imposed enormous tax hikes, perhaps it would be more accurate to say that the crisis has deepened in part because of the wrong kind of austerity. Regardless, what matters now is that Greece is on life support by international aid and with little hope for the future.

Now ask yourself a rhetorical question. Wouldn’t it have been preferable if there was some sort of mechanism, say, fifteen years ago that would have enabled some lawmakers to throw sand in the gears so that the government couldn’t issue any more debt?

The small-government advocates need to sit down over the next month or so and agree on a common strategy.”

With our keen powers of hindsight, don’t we wish that there was something akin to a Greek Tea Party that might have forced a reevaluation of entitlement programs and imposed some sort of cap on spending?

Yes, there would have been some budgetary turmoil at the time, but it would have been trivial compared to the misery the Greek people currently are enduring. The IMF and European Commission doubtlessly would have been aghast at the “hard-hearted” and “draconian” approach of the budget cutters, but nothing could be more hard-hearted and draconian than Greece’s current recession.

That, in a nutshell, explains why some reformers in Washington launched an uphill battle in hopes of at least temporarily delaying or defunding Obamacare.

Budget wonks know that America faces a very grim fiscal future because of poorly designed entitlement programs combined with unfavorable demographic changes. Unfortunately, recent presidents have worsened this problem. President George W. Bush saddled the nation with a new prescription-drug entitlement and President Obama imposed the so-called Affordable Care Act.

But the Tea Party-oriented lawmakers who wanted to block Obamacare before people began to get hooked on subsidies were unable to prevail: we have a deal and the wailing and hysteria in Washington is over. The politicians now have the authority to borrow more money and the bureaucrats are all back at work (rested and refreshed after their paid vacation, so they’ll probably tax, spend and regulate with extra fervor).

So what can we say about this fight? Here are five observations about what happened.

First, even though there was no real chance of derailing Obamacare, it was a good fight.

Under America’s system of separated powers, the House of Representatives could force a fight about Obamacare. That’s the good news. The bad news is that the odds of winning were between slim to none. The status quo almost always prevails with divided government.

It wouldn’t have made much of a difference if Republicans controlled the Senate. Simply stated, the President would have vetoed any legislation curtailing Obamacare.

That being said, I’m happy the libertarian-oriented members chose to fight. They brought some attention to a bad law. They forced Obama and his allies to play defense. Perhaps most important, they took a stand against the ongoing Europeanization of the American economy. That’s something to applaud, not criticize.

Second, maybe it’s just my own naiveté, notwithstanding nearly three decades in Washington, but I’m still surprised when journalists write headlines about how “Republicans shut down the government,” even though the stalemate happened because of a disagreement between Republicans and Democrats.

More distressing, journalists kept writing that the United States was in danger of default, even though the federal government is collecting twelve times as much revenue as required to pay interest on the debt. Simply stated, default would only occur if the President wanted it to happen.

Third, the shutdown may be a political plus for supporters of small government.

The polling data says Texas senator Ted Cruz and his allies were the losers, but I’m not worried about political damage. Indeed, I think the fight was a victory. If nothing else, the fight sidelined the left’s agenda. Instead of debating how to expand government or how to raise taxes, we had a battle over Obamacare. That’s a good thing. Moreover, as more consumers and taxpayers learn about the deep flaws of the President’s main “achievement,” they will appreciate that some lawmakers fought very hard to curtail government-run healthcare.

This won’t stop the media from talking about a “defeat” for the Tea Party. What matters most, though, is what happens in future elections, and I suspect the 2014 election will generate good results for the Cruz-type lawmakers. Remember, congressional Republicans did very well in the 1996 elections, even though pundits said they would suffer as a result of the 1995-96 shutdown fight.

Fourth, there will probably be another shutdown-debt limit fight in a few months.

The current agreement kicks the can down the road. The government is now funded through January 15 and the government’s new borrowing authority will last through February 7.

So buckle your seat belts. Barring some unexpected development, we’ll have a similar fight early next year.

Fifth, one obvious lesson for Obamacare critics is that the GOP establishment and the insurgents should agree on a common strategy.

Democrats had a big advantage in the recent fight because they locked arms and agreed to unanimously resist the efforts to curtail Obamacare. They cast some tough votes in favor of the individual mandate and in favor of Obama’s special exemption for Capitol Hill. But that unified strategy gave them a big advantage over Republicans, who agreed on the goal of curtailing Obamacare but disagreed on the defund strategy.

The small-government advocates need to sit down over the next month or so and agree on a common strategy. The insurgents would learn that the establishment crowd is sometimes willing to do the right thing (such as the Ryan budget) and the establishment lawmakers would learn that the insurgents are willing to be “reasonable” if there’s a plan to move the ball in the right direction.

If they put their heads together, maybe they’ll agree to go after a specific feature of Obamacare. Maybe they’ll push for overall entitlement reform. Or maybe they’ll go with my top choice, which is some sort of spending cap akin to the Swiss Debt Brake, such as Congressman Brady’s MAP Act.

Every responsible lawmaker, after all, should agree that the status quo is unacceptable. Unlike what happened in Greece, some policy makers in America want to act before it’s too late.

Daniel J. Mitchell is a Senior Fellow at the Cato Institute.