Nov 13

Nov 13 As yet another deadline looms, a divided U.S. House stumbles closer to a federal shutdown

Once again, federal budget negotiations are down to the last minute, and once again, GOP hardliners are in the middle of what might turn into a gridlock.

Current government funding expires on Nov. 17, 2023. While newly elected Speaker of the House Mike Johnson has not announced any new and specific proposals that stand the chance of passage in the Democratic-controlled Senate, he has urged the public to “trust us.”

Here are five insights from the work of scholars who study Congress and federal budgets.

1. How a government shutdown affects the economy

In the past four decades, the government has shut down 20 times.

During the Trump administration, the government shut down three times, the longest starting three days before Christmas in 2018 and lasting 34 days.

Northwestern finance scholar Scott R. Baker examined a shutdown in 2013 to determine both short- and long-term effects of the federal government closing down.

Baker wrote that the most immediate impact of a shutdown is on the government’s day-to-day operations.

“Many national museums and parks are closed, immigration hearings are being postponed, and the Food and Drug Administration isn’t doing routine inspections of domestic food-processing facilities,” Baker wrote.

Whether or not a shutdown has a longer-term economic impact, Baker explained, depends on “how long the shutdown lasts and whether employees are paid their foregone wages after its conclusion.”

2. Congressional dysfunction?

As a public policy expert and former deputy director of the Congressional Budget Office, Raymond Scheppach said he believes the challenges in 2023’s negotiations over the budget are the greatest faced in the last five decades.

The reason, Scheppach explained, is the result of “the magnitude of the differences” between the Republican and Democratic parties, as well as the split between the GOP-controlled House and the Senate, where the Democrats hold sway.

“A worst-case scenario could see a government shutdown for several weeks, or even a couple of months – and that could have a significant negative impact on the economy,” he wrote.

3. Beyond partisan gridlock

As a political scientist who studies the evolving budget brinkmanship, Laura Blessing asks an important question: What are the costs of congressional dysfunction?

One such cost is the added bureaucratic burden on federal agencies to submit shutdown plans to the Office of Management and Budget as required by law. Though as of late September, 80% of the plans had been updated since 2021, no two shutdowns are exactly alike, and agencies are continually revising their plans, which help sketch out the variety of ways the shutdown will affect individual Americans.

And that’s the most immediate concern for most people of the country.

“Whether delayed business loans, slower mortgage applications, curtailed food assistance or postponed food inspections, the effects could be substantial,” Blessing wrote.

4. An ideological battle

David R. Jones, a scholar of Congress, political parties and elections, noted that one important factor in the House dysfunction over the federal budget is the difference in party ideologies.

As Jones wrote, Democrats generally agree that a functioning government is needed to help solve societal problems. Even dissident factions within the Democratic Party are typically unwilling to shut down government operations indefinitely in order to extract concessions from their leadership.

Not so the Republicans.

They are more likely to believe, as President Ronald Reagan famously stated, that “government IS the problem,” Jones wrote.

“This means that dissident factions in the Republican Party can much more credibly threaten to indefinitely halt government operations – doing so does not conflict as much with their policy goals. In turn, the fact that they have less incentive to drop their obstruction gives them more leverage over their party’s leadership.”

5. Federal workers feel the pain

As a researcher who studies people’s wealth, Jay L. Zagorsky understands that the loss of a single paycheck can be devastating for many American families.

During the 2019 partial shutdown, about 800,000 federal workers were either furloughed or working without pay.

“Going without a paycheck for a few weeks is hard enough,” Zagorsky wrote. “If the shutdown lasts months or years, the situation could get very dire for the average government worker.”

Zagorsky noted that there is a bit of good news.

“Congress tends to give all affected workers back pay, regardless of whether they worked during the impasse,” he wrote.