The House Rushes for a Shutdown

Here is the editorial from the New York Times from 9/29:

"This may be the way the world ends — not with a bang but with a temper tantrum.

 O.K., a temporary government shutdown — which became almost inevitable after Sunday’s House vote to provide government funding only on unacceptable conditions — wouldn’t be the end of the world. But a U.S. government default, which will happen unless Congress raises the debt ceiling soon, might cause financial catastrophe. Unfortunately, many Republicans either don’t understand this or don’t care.

Let’s talk first about the economics.

After the government shutdowns of 1995 and 1996 many observers concluded that such events, while clearly bad, aren’t catastrophes: essential services continue, and the result is a major nuisance but no lasting harm. That’s still partly true, but it’s important to note that the Clinton-era shutdowns took place against the background of a booming economy. Today we have a weak economy, with falling government spending one main cause of that weakness. A shutdown would amount to a further economic hit, which could become a big deal if the shutdown went on for a long time.

Still, a government shutdown looks benign compared with the possibility that Congress might refuse to raise the debt ceiling.

First of all, hitting the ceiling would force a huge, immediate spending cut, almost surely pushing America back into recession. Beyond that, failure to raise the ceiling would mean missed payments on existing U.S. government debt. And that might have terrifying consequences.

Why? Financial markets have long treated U.S. bonds as the ultimate safe asset; the assumption that America will always honor its debts is the bedrock on which the world financial system rests. In particular, Treasury bills — short-term U.S. bonds — are what investors demand when they want absolutely solid collateral against loans. Treasury bills are so essential for this role that in times of severe stress they sometimes pay slightly negative interest rates — that is, they’re treated as being better than cash.

Now suppose it became clear that U.S. bonds weren’t safe, that America couldn’t be counted on to honor its debts after all. Suddenly, the whole system would be disrupted. Maybe, if we were lucky, financial institutions would quickly cobble together alternative arrangements. But it looks quite possible that default would create a huge financial crisis, dwarfing the crisis set off by the failure of Lehman Brothers five years ago.

No sane political system would run this kind of risk. But we don’t have a sane political system; we have a system in which a substantial number of Republicans believe that they can force President Obama to cancel health reform by threatening a government shutdown, a debt default, or both, and in which Republican leaders who know better are afraid to level with the party’s delusional wing. For they are delusional, about both the economics and the politics.

On the economics: Republican radicals generally reject the scientific consensus on climate change; many of them reject the theory of evolution, too. So why expect them to believe expert warnings about the dangers of default? Sure enough, they don’t: the G.O.P. caucus contains a significant number of “default deniers,” who simply dismiss warnings about the dangers of failing to honor our debts.

Meanwhile, on the politics, reasonable people know that Mr. Obama can’t and won’t let himself be blackmailed in this way, and not just because health reform is his key policy legacy. After all, once he starts making concessions to people who threaten to blow up the world economy unless they get what they want, he might as well tear up the Constitution. But Republican radicals — and even some leaders — still insist that Mr. Obama will cave in to their demands.

So how does this end? The votes to fund the government and raise the debt ceiling are there, and always have been: every Democrat in the House would vote for the necessary measures, and so would enough Republicans. The problem is that G.O.P. leaders, fearing the wrath of the radicals, haven’t been willing to allow such votes. What would change their minds?

Ironically, considering who got us into our economic mess, the most plausible answer is that Wall Street will come to the rescue — that the big money will tell Republican leaders that they have to put an end to the nonsense.

But what if even the plutocrats lack the power to rein in the radicals? In that case, Mr. Obama will either let default happen or find some way of defying the blackmailers, trading a financial crisis for a constitutional crisis.

This all sounds crazy, because it is. But the craziness, ultimately, resides not in the situation but in the minds of our politicians and the people who vote for them. Default is not in our stars, but in ourselves.

This time, it wasn’t just a few Tea Party hotheads who drove the United States government to the brink of shutting down. Early Sunday morning, all 231 House Republicans (along with 17 Democrats) decided that crippling health care reform was more important than keeping the government’s doors open. It was one of the most irresponsible votes since the last shutdown in 1996.

The chairman of the House Appropriations Committee, Harold Rogers of Kentucky — a 32-year veteran who should know better — stood on the House floor and disingenuously claimed that the Republicans were not trying to provoke a shutdown. He called their amendments to the temporary spending resolution, which would put the health reform law on hold for a year and repeal a tax on medical devices, “a peaceable offer” to the Senate, a helpful compromise.

In fact, they know that these outrageous conditions for keeping the government open stand no chance in the Senate when it reconvenes on Monday just hours before government funding runs out at midnight.

Delaying the health law by a year, supported by all but two House Republicans, would prevent 11 million uninsured people from getting coverage in 2014 and raise premiums for those buying coverage in the individual insurance market. The real goal is not to delay but to destroy health reform by making it appear unworkable, in hopes that the public will not see the affordable premiums that will be available on the new health insurance exchanges where people can shop for plans starting Tuesday.

Repealing the tax on medical devices, supported by all House Republicans, would add $30 billion to the deficit over 10 years and reduce the revenues needed to pay for coverage for low-income people. This vote was nothing but a capitulation to the medical device industry and its lobbyists, though the industry stands to gain from a larger population of insured patients.

The House even included in its spending bill a provision allowing employers to opt out of covering women’s preventive health care, including contraception. When they should have been thinking about the damage to the economy from a shutdown, Republicans decided to go to the brink with this hugely unpopular right-wing demand.

A few hours before midnight is the worst possible time to reignite the culture wars, but House members are too delirious with ideology to care. John Culberson of Texas described his reaction at a meeting of Republican lawmakers: “I said, like 9/11, ‘let’s roll,’ ” as if his partisan antics were somehow on a par with the ultimate sacrifices of ordinary citizens 12 years ago.

The comparison was nauseating, and when the Senate returns on Monday, it needs to reject the entire House package immediately. It may be impossible to prevent a shutdown at this point if the House continues to prefer dueling to governing, but at least the public will clearly see the source of the nation’s wounds.

Why a temporary spending (continuing resolution) bill?

Because the Congress has failed in its basic constitutional duties to adopt, through an orderly process, spending, revenue and debt legislation. 

Exactly ZERO of a dozen appropriations bills have gone as House/Senate conference committees, adopted by both houses, and sent on to the President for his signature or veto. For months, the House has refused to confer with the Senate. 

The House Republican majority violates the budget it adopted this year with this bill, increasing the deficit and driving up insurance premiums to boot.

But none of that makes any difference. House Republicans don't care about their responsibilities under the Constitution or even votes they themselves have taken. 

They are there to destroy."