Recent news out of Congress has been about the possibility of a dramatic face off between President Obama and the Congress over spending. The newly Republican House has been demanding deep cuts in what's left of Fiscal 2011 (it ends on Sept. 30) and threatening to "shut down the Government" if they don't get their way.
As they say in Hollywood, we've seen this movie before. In 1995, after the Republicans took over both Houses of Congress, then-Speaker Newt Gingrich pushed through a budget that sent President Clinton a simple message: accept our numbers, or we will refuse to fund all but the most essential government services. The "shutdown" that occurred when Clinton refused to go along was only partial — the same would be true if it happened again — but it had a significant impact, both politically and financially. Since we are looking at a possible re-run of this strategy, it's worth examining its history.
Politically, it damaged the Republicans because it gave President Clinton the opportunity to emerge from the confusion as a real leader, a man who could stand up to pressure while making the case for sensible solutions. Most observers believe that it was the key moment when Clinton stopped his political decline and started on the road to re-election. The only major figure that I have seen who has publicly disagreed with that analysis has been Gingrich.
Financially, the impact was less obvious but still serious. If we think of the Government as a multi-trillion dollar business, it is clear that such an enterprise cannot be managed efficiently if both the authority to spend and the amounts available for spending are in constant doubt. Appropriations bills don't just contain total dollar figures; they also allocate how those dollars will be spent. The specifics of those allocations change from year to year.
The way the Congress has proceeded in Fiscal 2011, passing one short term temporary bill after another, has meant that the managers of the various government agencies have been left with last year's priorities, uncertainties about this year's allocations and an unreliable timetable with regard to when things will be settled. Those who see this exercise as a cost cutting move should know that it always causes inefficiency and increased expense.
Consider the defense budget, which is over half a trillion dollars. Juggling some of those dollars between accounts to keep the department functioning while Congress makes up its mind as to what it will finally do means delays for any new initiatives that would save money — temporary shortchanging programs that will be more expensive when they are restarted which overall is a waste of management time and effort that should be spent on more productive things. I am told that the pulling and tugging that has gone on over this issue has already cost the Defense Department hundreds of millions of dollars and that the same is true in other departments as well.
Negotiations with regard to Fiscal 2011 are moving forward, and it is predicted that the matter will be resolved in mid April. But that hopeful report comes from the same sources that said it would happen in early March, and there are members of Congress who say they will still push for a shutdown if they don't get everything they want. Most of them are politicians who do not wish President Obama well, and all of them claim to want to cut government waste. Ironically, if the Clinton-Gingrich confrontation is any guide, if they succeed in bringing on a confrontation, their actions could help Obama and cost the taxpayers more money.
Robert Bennett, former U.S. Senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.