The news cycle is so short these days that this post already feels like old news. It’s been in the headlines a lot lately, but what exactly is a government shutdown? You may already know a lot of this, so if you’re pretty up to speed on the subject, feel free to skip ahead a bit.
It’s not totally realistic to compare a federal budget to a household budget, but we’ll start there. Whatever sources of income you have…that’s the money you have available to spend. If you spend more than you take in, you’re running at a deficit and you end up going into debt if you keep it up. For the average Jane or Joe, you can’t just continually spend at a deficit and go further into debt without running into some serious problems. If you die with debt, the debt still exists somewhere and gets passed along somehow. The federal government, so the argument goes, never actually has to pay off its debt because unlike a normal citizen, the government doesn’t actually die. The thinking here is that you can keep running at a deficit indefinitely.
That might be true if the debt was kept at reasonable levels or if you have years every now and then where you pay some off. Unfortunately, our government loves to SPEND money. We spend money on things that are necessary (interstate highways, a military, disaster relief, etc.), and we spend money on things whose value is more difficult to identify. We spend a lot of money on special projects that don’t benefit anyone other than constituents of specific political districts.
Our politicians, like others around the world, do what they have to do in order to remain in power. In our case, the House of Representatives is in charge of putting forth the budget every year. Representatives in Congress run for reelection every two years (meaning they’re constantly either in a campaign or are preparing for one), so they look for opportunities to throw extra money at organizations in their Congressional district in an attempt to gain favor, and to have something positive to point at in their next campaign season. We’ve got 435 Representatives, so you can imagine how, with each of them trying to throw a little extra green at their home district, this quickly adds up to numbers that extend way beyond the basic budget.
Now, here’s a curveball. Most of the drama leading up to a shutdown is intentional. Everybody (especially those in Congress) knows that there’s wasteful spending in the federal budget. You could argue that the fairest thing to do is to cut all the extra pork out of the budget, but that will also affect representatives differently. Because it’s a complicated issue, most Reps opt not to change what’s already been decided. Our Representatives in the House know that if they avoid taking meaningful action until very late in the process, it builds pressure on the entire body to approve temporary extensions (called “continuing resolutions”) that continue funding the government at the rate it’s been using. It does nothing to modify spending levels or remove any wasteful spending, it just keeps doing what it’s been doing for a little longer.
Here’s where the brouhaha from last week comes in. In the last election cycle, Republicans won back control of the House, so they obtained the right to decide how to lay out the budget (though the Democrat-controlled Senate and White House both have to sign off on any budget proposals). Republicans ran on the idea of reigning in DC’s out-of-control spending. The way they planned to do it was by passing individual bills for the obviously necessary parts of the budget (the Farm bill, funding for the Department of State, the Department of Defense, etc.), meaning that funding for a large amount of the current wasteful spending would simply disappear. If this had happened, this would have saved us a huge chunk of money as a nation.
The problem is that they couldn’t get it done in time. There was some brinksmanship, some games, some intentional pressure-building, and in the end they said “hey look, we want to continue with this ‘fund the essentials’ approach, but we ran out of time. Let’s pass a 45-day continuing resolution to give us the time we need to pass about a dozen of these bills that will fund the stuff we really need.”
Toward that end, the Republicans passed an extension of a Democrat-designed budget (including very high spending levels for the priorities laid out by Democrats) in order to try to enact an approach that requires the agreement of a bunch of people that don’t truly want it to succeed. A few of the Republican reps in the House said “we have to draw the line somewhere,” opposed the proposed bill, and then lashed out against now former Speaker of the House Kevin McCarthy when he framed the budget to gain support from some Democrats. This week McCarthy was voted out of his Speakership role and has announced he does not want the job again.
Now all real work in Congress (including work on those multiple bills that will fund the crucial parts of the government) stops until the House can vote in a new Speaker. Last time they had to pick a speaker, it took four days and 15 rounds of voting before McCarthy got enough votes. The clock is still ticking on those 45 days, and many of the House’s representatives are just fine with bumping up against that new November 17 deadline without a permanent budget in place, because it increases the chances they’ll pass another continuing resolution to keep funding the pet projects that are meant to make people in their home districts happy.
The sad truth is that our government consistently spends more money than it takes in, and the national debt has reached mind-boggling levels with few politicians willing to do anything about it. While all the focus has been on the debt ceiling, the national debt has ballooned to unsustainable debt-to-GDP ratios. We have so much debt at this point that, due to debt and high interest rates, we now have to use almost a fifth of our budget to service our debt. A fifth! If you had to use 20% of your income to pay off credit card bills, imagine the financial freedom and new possibilities that would open up to you if you didn’t have that expense. The government is using our tax dollars very inefficiently, and as our credit rating keeps dropping, it will affect all of us at the personal level by having a higher floor for interest rates. All the folks in DC get to shrug their shoulders and point at someone else.
So that’s what we’re dealing with. Hopefully the House will be successful in passing some clean bills this month or next so we can start paying back some of that debt.