This article was first published at The McAlvany Intelligence Advisor on Monday, July 29th, 2013:
Tuesday’s announcement by Senate Majority Leader Harry Reid that he wouldn’t consider anything the House passed that didn’t repeal the sequester “cuts,” followed by Utah Senator Mike Lee’s letter that he and 11 other senators would block any budget that contained spending to implement Obamacare, have set the battles lines for October. So “sequester” and “Obamacare funding” are back in vogue. Like the battles line drawn at Gettysburg, the left and the right are lining up their cannons.
Reid said he has “no interest” in continuing the sequester cuts, even though they amount to little more than rounding errors in a $4 trillion budget. Continuing these cuts will in his mind have “dangerous consequences” for the economy: “I think [continuing the sequester] would be a disaster for this country and I would do everything within my ability to oppose that.”
On Thursday, Mike Lee outlined his position in a letter signed by conservative worthies such as Marco Rubio and Ted Cruz that they wouldn’t approve a continuing resolution to keep the government running if it contained any spending to implement Obamacare. Part of his letter said:
The Obama Administration’s recent decision to delay Obamacare’s employer mandate … is further proof [that] the law is a failure…
I call on all Americans who oppose the unfair implementation of the president’s health care law to join us in the effort to fund the government, but not Obamacare.
If the president can’t follow his law, then the American people shouldn’t fund it.
Obama has sent signals that he will veto anything that comes to him that shuts off funding for Obamacare or doesn’t eliminate the sequester cuts. And the Republican “leadership” is pressuring its weak-kneed members not to sign Lee’s letter, or to remove their names if they already have.
It’s a particularly sticky wicket for Senate Minority Leader Mitch McConnell, who has said publicly and frequently that he wants to end Obamacare. He faces a tea party challenger in the Kentucky Republican primary and a Democrat in the November 2014 midterms. Of course McConnell’s office had no comment.
Previous government shutdowns in Minnesota and New Jersey, plus the “big one” under Clinton in 1995-96, show what’s likely to happen if there’s a shutdown in November: nothing much except higher taxes and more government spending.
Minnesota Governor Tim Pawlenty shut down the state government for a few days in 2005 over the issue of how much to spend on schools and health care, but turned the lights back on under a compromise that – guess what? – increased taxes and passed the bulk of the problem on to the next governor, Mark Dayton.
That $5 billion budget shortfall was an issue in Minnesota in 2010 when Dayton was elected on the promise that he would increase taxes on the rich. The problem is that both state houses were taken over by the Republicans, who said “no way,” which led to the shutdown. The issue was resolved when Dayton compromised, a little, while the Republicans agreed to continue spending.
New Jersey Governor Jon Corzine – made famous in his later role as thief in chief of the MS Global robbery – shut down the state government in 2006 for about five days. At that point, the legislature agreed to an increase in the sales tax from 6% to 7%, along with increased taxes on downloaded music, ringtones, movies and books, shipping and handling, drapery and carpet cleaning, magazines, flooring installers, landscapers, tanning salons, massage parlors, tattooing, alarm systems installers, limousines, and memberships in health clubs. Also increased were taxes on cigarettes and on new cars costing more than $45,000 or getting 19 miles per gallon or less, plus a nice new 9% tax on fur clothing. Oh, yes, the rental-car tax went from $2 per day to $5.
So the governor got what he wanted, and New Jerseyans loved him for it: His approval rating shot up (while the legislators’ went down) following the shutdown.
The most famous of all shutdowns, however, happened in late 1995 and early 1996 when President Clinton clashed with House Speaker Newt Gingrich over spending and taxes. To put things simply, the government shut down a few non-essential services for 28 days while the media made the most of the “pain” being inflicted by the vile Republicans. The Republicans capitulated and were so badly mauled that they have not dared to touch the “shutdown” third rail since. And, just as in New Jersey, Clinton’s public approval ratings reached their highest of his presidency after the government came back online in January.
What does this portend for what’s coming in October? It’ll be fun to watch, of course, as various parties stake out their positions on the issues – line up their cannons for the fight – but, if history is any guide, it’ll turn out to be much ado about nothing … again. Government spending will continue, Obamacare will be cemented into place, and the Republican leadership will further damage what remains of their credibility as advocates of smaller government and lower taxes. The tea party will be vindicated for being right, but will not have enough supporters with backbone among its adherents to make a difference.