Horwitz on Shutdown’s blame

From my column, Civil Affairs, at The Justice. For astute readers of this blog, I apologize for the somewhat duplicate statements on the issue. Last week, I specifically wrote about the Texas implications of the deal. Being that my recent opinion article is in a Massachusetts newspaper, the same (sadly) could not be said again. Still, I invite you to read the article.

This past Wednesday, the leaders of the United States Senate came up with a deal to end the government shutdown that had been going on since the start of the month and to avert a government default on outstanding debt that could have occurred the next day. The deal, which solved a problem Republicans exclusively created, kicked the problem down the road until early next year, but did so without any preconditions, such as repealing part of Obamacare or implementing massive spending cuts or entitlement reforms. The measure passed by huge bipartisan margins in the Senate, before heading to the House of Representative, where it passed with mainly Democratic votes.

Accordingly, looking at the crisis post- mortem, the pundits in the media have attempted to lay blame for the 16 days the government shutdown, which caused an estimated $24 billion in lost output to the economy.

Most pundits, in a spirit of low-information, low-controversy, have assigned blame to both parties in a pursuit of evenhandedness for evenhandedness’ sake. “I see the problems of both,” or “they’re equally to blame,” are the often-repeated clichés uttered time and again on television. Even ostensibly moderate publications, such as CNN and Time Magazine, have pursued this strategy.

It is extremely important to note, however, that this is not even close to being true. The recent drama has hinged over two deadlines that were taken hostage by Republicans and used as bargaining chip. One such deadline, the debt ceiling, is never appropriate for that goal because the global economy could be put into a cataclysm by a sovereign default. The other, a government shutdown, is sometimes appropriate but not for the specific goal the Republicans used it for. While it does not, of course, lead to a financial meltdown, exacting non-fiscal demands in a fiscal matter is wholly inappropriate.

The biggest demand of Republicans, led in this instance by Sen. Ted Cruz R-Tex., was to repeal or defund all or a substantial part of Obamacare, the President’s key health care reform act. This demand, which does not add to the nation’s deficit in any way, was unfairly attached to any and all bills either creating a budget for the recently started fiscal year or a continuing resolution to fund part of it. While seemingly irrelevant items are often lumped together into bills known as “riders,” the riders are never seen as an invaluable part of the legislation—where their removal would cause major opposition.

Similarly, the demand was affixed to efforts to raise the nation’s debt ceiling, a somewhat arbitrary upper bound of the amount of money the country may borrow at any one time. The United States has raised the debt ceiling over 100 times since its inception about a century ago. Before President Obama took office, it was always a somewhat non-controversial action, deemed absolutely necessary, by presidents of either party. That is because the risk of the United States defaulting on its currency is so execrable that no rational person could bear to humor the idea. A possible default would cause a run on the U.S. dollar, as well as astronomical borrowing costs for the country in the future. International institutions, such as the World Bank and the International Monetary Fund, have lamented the mere possibility of a United States sovereign default, calling the idea “dangerous” and warning it could create a bigger financial meltdown than the recession of 2008.

It is wholly unacceptable for politicians to play partisan games with the debt ceiling. The simple possibility of a default caused Standard & Poor’s, the country’s leading credit rating agency, to downgrade the credit rating of the United States in 2011, and this year’s crisis could cause a further downgrade from Fitch’s credit rating agency. These downgrades actually increase the debt burden of the country by causing the nation’s interest rates on borrowing to rise.

However, when it comes to a government shutdown, the stakes are not nearly as high. After all, the government shut down for 16 days, and no meltdown, financial or other, occurred. But it is important to note that the reason the Republican Party refused to support a budget or continuing resolution without preconditions was not anything fiscally related. Instead, almost like a social issue, John Boehner, speaker of the house, refused to bring bills to the floor of the House before the government shutdown that did not defund, gut or repeal Obamacare. One could only imagine the universal castigation the Democrats (rightly) would receive if they were in a similar minority position, and shut down the government because the Bush tax cuts were not repealed.

The GOP is the only party responsible for the recent shutdown and near-default. This is the third year the Republicans have controlled the House, but only the first time they have conflated the government’s budget with the repeal of an unrelated piece of legislation. The Republicans moved the goalposts, and should be blamed as such.

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