No Government Shutdown Is Just Delaying Things

Updated Below

It appears that the federal government will not shutdown this week.  The House is voting today on two-week Continuing Resolution.  The CR would cut four billion in government spending and would provide time for further debate on funding the government for the remainder of the fiscal year.  This is going to get interesting.

As the New York Times notes today, Republican House Freshmen are torn.  They do want to avoid a shutdown, but not the expense of their principles.  Many of these freshmen were single issue candidates and the issue was the size of the federal government – and how to shrink it.  After spending last week in their districts we may see them even more reluctant to compromise.

They haven’t had to compromise yet.  The freshmen forced the Republican caucus to increase the amount of proposed spending reductions to $61 billion two weeks ago.  Some want to go even further and make the raise the actual cuts to $100 million.  They may swallow a bitter pill today and vote for the CR, but won’t yield in the debate to come.

Democrats aren’t happy with the CR either.  Though the White House and Majority Leader Reid’s office both seemed positive about the movement toward passage of a CR with $4 billion in reductions, Minority Leader Pelosi shot off a statement criticizing the agreement and saying that this “was not a good place to start”…

“…Republicans want to cut an additional $4 billion, which includes stripping support for some pressing educational challenges without redirecting these critical resources to meet the educational needs of our children…”

The Washington Post found further divisions amongst Democrats.  The Democratic Caucus chair, Rep. John Larson, said he will support the resolution while Rep. Becarra, the Vice-Chair is going to vote against the bill.  This may be because this is not 1995.  After the shutdown in 95 a majority of people blamed Speaker Gingrich and the Republicans.  It contributed to President Clinton’s landslide 1996 victory.  A recent Washington Post Poll showed the blame would be split between Republicans and Democrats this time with the President slightly edging Republicans with regard to who is willing to negotiate to make it work.

The Continuing Resolution avoids the acrimonious reductions that our leaders will have to deal with over the next two weeks.  While it cuts funding to certain education programs, highways, and elections assistance it aligns with much of what the President cut in his budget.  Many of these programs are duplicative or unused.  Intact for now is funding for Planned Parenthood, LIHEAP, CDBG, CSBG, and the EPA – to name a few.

This leads us to 700,000.  An economist at Moody’s and economic adviser to then candidate John McCain  said that the Republican budget plan would cost 700,000 jobs by the end of 2012.  That’s just the cuts to fiscal 2011 budget, not the 2012 budget which will be debated in a few months.  A Goldman Sachs analysis for a client was leaked and forecast the $61 billion in cuts would drag the economy down 1.5 – 2 percentage points.

Republicans, when not plugging their ears and hoping we didn’t read the reports, are sneering words like stimulus when they dismiss the reports.  Mark Zandi, the Moody’s economist supported the stimulus.  He helped to craft it and still believes that it kept the economy from going the way of Thelma and Louise.  That’s enough to make him a partisan Democrat and make his numbers pure fantasy.  Unfortunately for Speaker Boehner and Rep. Cantor,  Zandi also took the Democrats to task for believing that they can maintain government spending at current levels.

Let’s not forget that Speaker Boehner doesn’t care about job loss.  As he said two weeks ago, if this leads to certain jobs going away…”So be it”.  Rep. Cantor jumped in yesterday with this gem, “What kind of jobs is he talking about? Is he talking about government jobs? If so, why is the government hiring people it can’t afford to pay?”  This ridiculous assertion that public sector jobs don’t count is getting tired.  A job is a job.  It keeps people in their homes, able to purchase food and pay for their children’s education.  A public job means spending power which means participation in the economy.  The bonus with a public employee is that he or she is providing a service to the state – teaching children, guarding prisoners, cleaning public building, even collecting taxes.

We don’t need the government to create more public jobs, but we can’t afford to increase the amount of people filing for unemployment by decimating the public sector.  Private industry can’t make up our job losses right now.  Private industry is not hiring at the rate that we need it to.  It won’t for a while.  This is simply not a matter of reducing corporate taxes and subsidizing businesses so they can create jobs.  It’s about keeping Americans employed.

The economy has been growing over the past year.  Main street isn’t feeling it yet, as unemployment is still high, but Wall Street is back to rolling in it.  Business is making money again.  Unfortunately, the rest of us aren’t.  We’re not shopping as much.  We’re not using as many services.  Until we can afford to buy more, until the consumer comes back, job creation will be down.

We’re going to be back here two weeks from now.  We know $61 billion is going to devastate the economy.  The Republicans do too, but don’t seem to care.  For many Republicans that’s the point.  Shrink the government, regardless of the consequences to the nation or their election chances.

“There are a lot of freshmen that just don’t care about the consequences of not being elected” – Rep. Paul Gosar

If they get to de-fund Planned Parenthood, restrict abortion, eviscerate the EPA, and terminate funding for AmeriCorps, PBS, NPR, and the NEA – all the better.  Wisconsin is energizing liberals and Democrats finally seem to be finding their footing.  $61 billion was unacceptable when it passed last week and that won’t change.  This is no longer a budget fight. When it’s over – in two weeks or two months and a few more CRs I’m guessing we’ll see cuts closer to what the Republicans originally proposed – a still dangerous, but less so, $35 billion.  Republicans are great at proposing something so outlandish ($61.5 billion) that what they actually want seems reasonable.  That’s how they get to $35 billion.

It’s a battle of ideology and leadership.  I think ideology will end up winning, but I hope not.

Update: 3.1.11

The House passed the Continuing Resolution with a large majority, 335-91.  The CR contained $4 billion in cuts and moves onto the Senate where it is expected to pass without a problem.  Only six republicans voted against the bill, which means that Tea Party freshmen may have a lot of explaining to do in their districts if the $61 billion in cuts (for the last 7 months of 2011) is reduced by the Senate.  Rep. Steve King (R-IA), helping to prove that Republicans care more about social issues than jobs, voted with Democrats because the CR did not strip funding from Planned Parenthood or the new health care law.

Democrats voting against included Minority Leader Pelosi (D-CA) and Whip Jim Clyburn (D-SC). An amendment, offered by Democrats, to end subsidies to oil companies failed with 13 Democrats joining all of the Republicans in voting no.  So, we have a funded government for another two weeks after Friday.

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