THE WISDOM OF SHUTTING DOWN THE GOVERNMENT
On March 4 if Congress has neither agreed to an overall spending bill nor a continuing resolution to finance federal government operations, most of the government will cease operating. Almost all members of Congress fear and loathe a shut down. A shut down would be, however, the best means to cut the budget between now and the November 2012 elections. There is wisdom in shutting down the federal government. Doing so greatly benefits the nation, liberating the most productive elements of the economy from the onerous weight of regulation. There is no reason why a shut-down cannot occur while operations of the essential constitutional branches continue (Justice, State, Treasury, and Defense). Shutting down the rest of the government for years will reduce the budget by far more than the $61 billion in cuts the House Republicans have proposed and will achieve an elimination of regulatory constraints preventing economic recovery.
Partially heeding demands from the electorate in the 2010 mid-term congressional elections, House Republicans passed a spending bill that would make over $61 billion in cuts (we need triple that). The President’s budget would only increase overall spending. The House and Senate leadership are rumored to be brokering a continuing resolution with Senate Democrats for fear of the political fall-out that could come from a government shut-down. The House leadership recalls with trepidation how in 1995 President Bill Clinton turned a shut-down to his advantage when former House Speaker Newt Gingrich refused to budge on his commitment to reduce government spending, but times have changed. In 1995, the national debt stood at about $4 trillion (about 65% of the Gross Domestic Product (GDP) for that year). The budget President Obama just submitted to Congress would create a fiscal year 2011 debt of $15.476 trillion (about 103% of the GDP). Under the President’s budget the federal government would spend in 2011 more than the value of everything made in America. Economists predict that if government spending exceeds 90% of the GDP real economic growth is all but impossible. To say that we face a fiscal emergency is an understatement.
The present House Speaker has thrown down the gauntlet in a way that will redound to his political detriment if he does not keep his promise. “I am not going to move any kind of short-term [continuing resolution] at current levels,” said Boehner. “When we say we’re going to cut spending, read my lips, we’re going to cut spending.” If a compromise is reached with the Senate to keep the entire government funded for a time without enactment of at least the $61 billion in spending cuts, Speaker Boehner will rightfully be viewed as having broken his promise. Former President George H.W. Bush suffered rebuke at the polls when he broke his “read my lips” promise that there would be “no new taxes.” If Boehner wavers, he could well suffer the same fate as the former President.
The best approach for House Republicans is to insist on passage of the $61 billion in cuts and allow only for stop gap funding to keep the Departments of Justice, State, Treasury, and Defense operational. If forced to choose between no funding and funding for essential constitutional functions, Senate Democrats will have no real choice but to choose the latter. A closure of the remainder of the government, including the release of legions of federal bureaucrats at HHS, EPA, the Department of Education, the Department of Agriculture, and the Department of Energy, would yield huge budget savings and achieve instantaneous regulatory relief for the beleaguered private sector.
If the impasse were to continue until the 2012 presidential elections, there would be a distinct opportunity for the opponents of the President to stand for a revitalization of the economy achievable through sustained regulatory relief, tax cuts, and a budget for a much smaller, less intrusive federal government. The President, on the other hand, could be put to his defense of the existing bloated, budget busting government and, in particular, of his budget plan that includes none of the spending reductions and regulatory relief needed to revitalize the economy.
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In short, there is wisdom in shutting down the federal government, much wisdom. Why shouldn’t we shut down a government that is so enormous and constrictive that it stands as an enemy to innovation, opportunity, and liberty? This budget impasse invites the House of Representatives, from which all spending bills constitutionally must originate, to hold fast to the demand that the $61 billion in cuts be made and offer the Senate an interim spending bill that limits funding to the Departments of Justice, State, Treasury, and Defense. Through that means, America may in fact achieve the enormous spending cuts needed by preventing payment for all government beyond its essential constitutional functions.
This is a penultimate test of the integrity of the House leadership. If House Speaker Boehner honors his commitment to the $61 billion in cuts, he will have earned the respect of the electorate. If he dishonors that commitment, he will live in infamy.
� 2011 Jonathan W. Emord - All Rights Reserved