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Tuesday Talk: Worried about a federal shutdown?

September 24, 2013 By Joe Sheeran, Communications Director

Here we go again! The American people are facing a double whammy: we’re a week away from congressional conservatives shutting down the federal government and about a month away from defaulting on spending promises we’ve already made.

What exactly conservatives want is unclear, other than deep cuts to vital public services. The U.S. House already voted to defund the new health care law in exchange for a bill to keep the government running. They also significantly slashed SNAP (formerly known as food stamps) in a still unresolved farm bill fight.

These potential cuts combined with federal sequestration’s already present impact threaten the progress Minnesota’s legislative leaders made in 2013 to invest in communities, education, and health care and ensure tax fairness.

It’s not so long ago Minnesotans experienced a state government shutdown after conservatives refused to compromise on a budget two summers ago.

This morning between 8-9:30, Minnesota 2020’s John Van Hecke—who’s spent time working in both state and federal policymaking—will moderate this morning’s conversation.

How come progressives always have to be the adults?

Should we worry about avoiding shutdown?

 

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18 Comments:

  • Joe says:

    September 24, 2013 at 8:06 am

    Welcome to Tuesday Talk. We’re looking forward to hearing your thoughts on the possible shutdown.
    I also wanted to offer a quick addendum to the question above. It seems now there are several senate conservatives willing to move forward in a bi-partisan way to get things done. How do we use them to convince their friends?

  • John Van Hecke says:

    September 24, 2013 at 8:10 am

    On September 30, operational funding for the US government runs out. Absent authorizing action by the Congress, the next morning, the federal government effectively shuts down, at least partially. If this happens, it’s not a good development for Minnesota or our nation.
    The conservative-lead US House of Representatives recently passed a Continuing Resolution, extending spending authorization through mid-December. That pushes this policy direction crisis back for two and a half months but, contained in the bill, is language that eliminates Obamacare. This makes the CR’s passage in the Senate extremely unlikely and improves the likelihood of an October 1 shut down.
    What do we –the collective we, as Americans and Minnesotans- do to find a compromise?

  • John Van Hecke says:

    September 24, 2013 at 8:20 am

    I should probably start with a hearty good morning. I prepped for today’s Tuesday Talk discussion by running through the structural political and policy factors with two sleepy teenagers and my fully caffeinated spouse over breakfast. Their collective response: what do conservatives in the US House of Representatives think they’re gaining?

    That’s a fair question.

    I’m not going to spend time getting into evaluating partisan political strategy because, first, that’s not what we do at Minnesota 2020, and, second, I think the traditional partisan frame is inadequate to explain this challenge.

    I used to work for the late Congressman Bruce Vento. He taught me that many issues, while passed off as partisan fights, are actually larger economic and regional interest fights. In the tug-and-pull between banking and insurance regulatory interests for example, Minnesota is much more of a banking state than we are an insurance state. Connecticut, on the other hand, is a huge insurance company state. Consequently, elected leaders tend to reflect their states’ interests rather than partisan divide.

  • Mike C says:

    September 24, 2013 at 8:24 am

    Sounds like the left is the child. I want more, I want this, I want that. As parents, we know what our budget is and how much to spend. If you can’t afford it or you don’t need it you don’t buy it.

    The GOP is being responsible and saying no. Why does the right need to move to the left, maybe be its time the left moves right. Like it or not, every house member won their election also and they hold the purse strings.

    The same is true for the unaffordable care act. They were in such a hurry to push it through that the people are now pushing back. The sad truth is more people are now going to be without health insurance. I had a talk the other day with a friend who owns a shop. He is dropping everyone’s hours and hiring no extra people because of the costs associated with the law. Yesterday on the news they were talking about how many employers are dropping the family from the health care plans at the office.

    It is time we start being responsible. 17,000,000,000,000 is to much money to be owing in the country.

    • John Van Hecke says:

      September 24, 2013 at 8:37 am

      Mike,
      Governments spend money differently than families spend it. The distinction is important because families act on a different set of economic incentives than do governments at any level. Growing up in North Hero Township in Redwood County, I learned that the township government’s greatest responsibility and expense was maintaining the township’s gravel roads. Controlling that cost -a somewhat singular affair- was very different than how my parents managed the early/mid 1980s farm crisis. While the farmers serving on the township board were individually tightening their family and farm belts, they never lost sight of the need for well-maintained gravel roads to help facilitate commerce and public safety. Broad strokes, while emotionally satisfying, aren’t the same as smart, effective public policy decisions.

  • John Van Hecke says:

    September 24, 2013 at 8:30 am

    A bit of history. The last federal government shutdown was in 1995, a result of a budget showdown between the conservative-led US House under Speaker Newt Gingrich and President Clinton. Eighteen years later, a little less than 20% of 535 members of the House and Senate served during that period. That means that 4 out of 5 Members and Senators have no first-hand experience with a shutdown.

    Our experience in Minnesota, particularly with the 2011 state government shutdown from July 1-20, strongly suggests that little good comes from yanking people’s chains. Minnesotans distinguish between philosophical differences and budgeting differences. Passing off the first as the second only earns public ire. Is that what national legislative leaders risk? Are they willing to promote conservative social engineering over the day-to-day common good of people living their lives?

  • Colleen O'Connor Toberman says:

    September 24, 2013 at 8:58 am

    I’ll admit, I’ve had a hard time following the many, many months of averted shutdowns and fiscal cliffs. Can you provide a bit of background as to how we got to this point, how many continuing resolutions we’ve already passed, etc.?

    • John Van Hecke says:

      September 24, 2013 at 9:12 am

      This is exactly the problem. Most of us don’t have any idea that the federal government is a week from shutting down. In practical terms, and that requires drawing on the 1995 experience, the “nonessential” functions of the US government will not have money to perform their function. Military and federal law enforcement forces will continue to work but the individuals will receive, in effect, IOU notes rather than paychecks. That’s profoundly unfair to those public servants and will quickly become a burden to their families. So, expect the nation’s park and forest system to come to a crashing halt while airplanes keep flying. If a shutdown happens, it will be a slow-motion crash. The worst, long-lasting effects won’t be felt for some time.

      Also, the House and Senate’s own procedures mean that taking up a Continuing Resolution at 11:45pm on Monday, September 30, probably means a one or two day shutdown. Congress needs to get a compromise into place this week. They can pass a final bill very late in the process but they can’t start the compromise bill on Monday evening.

      Finally, Congress effectively functions on a series of regular, on-going Continuing Resolutions. Its a way for the Congress to retain power in fights with the Administration. Think of this as an application of Congress’ “power of the pocket book.”

      • Colleen O'Connor Toberman says:

        September 24, 2013 at 9:23 am

        How is all of this different from or related to the 5% sequestration we already experienced?

        • John Van Hecke says:

          September 24, 2013 at 9:28 am

          Think of sequestration as “shut down lite”. Sequestration has been a blunt instrument for spending controls and a new public policy direction. A shut down will be an even blunter instrument. If conservatives have, so far, been bringing a ball-peen hammer to a budget fight, with a shutdown, they’re trying to bring a wrecking ball.

  • Joe says:

    September 24, 2013 at 9:00 am

    What exactly happens if there isn’t a new spending authorization before the 30th of September? What sort of impacts can we expect in Minnesota?

    • John Van Hecke says:

      September 24, 2013 at 9:18 am

      Many so-called nonessential federal government services will be suspended. Monitoring invasive aquatic species, for example, might be suspended. Minnesota’s Department of Natural Resources is deeply involved in this activity -its not a stand alone federal function- so monitoring won’t be immediately cut off. But, given enough time and lack of federal funding, Minnesota will have to prioritize monitoring, enforcement and other related functions.

      It’s important to remember that Minnesota is a “net payer” state. We pay more in federal taxes than we receive in federal spending. In part, that’s because we don’t have a large military presence here. Consequently, coastal states with large military bases and posts will feel the spending cuts sooner rather than later.

  • John Van Hecke says:

    September 24, 2013 at 10:42 am

    Here’s a question for everyone: why don’t people seem to know that we’re a week away from a federal government shutdown?

    • Ginny says:

      September 25, 2013 at 3:40 pm

      For a simple answer—I think it’s the media. I read a newspaper every day and watch PBS Newshour most evenings, and I can’t remember either of them saying—We are a week away from a government shutdown. Maybe they have and I missed it.
      Maybe people have tuned out all the noise from Congress. Most of us are tired of the yelling and threats, and we wish people like Ted Cruz wouldn’t waste our time reading Dr. Seuss. It’s easier just to shut it ALL out.
      And it’s bad news and people don’t want to think about bad news. It’s hard to keep from feeling despair when we read about all the killings in Egypt and Syria and elsewhere, plus people are hurting economically and they are not optimistic. The lies and stunts from the Republicans just further keep us from wanting to pay attention.

  • Jim Spensley says:

    September 24, 2013 at 5:19 pm

    We better be worried about the minimal staff of air traffic controllers and systems maintenance engineers at MSP if there is a shut-down.  As the NTSB says, MSP is seconds from a serious crash because of the intersecting runwaus and the increasing number of aborted approaches.

  • Mike Downing says:

    September 26, 2013 at 4:22 pm

    Alan Greenspan is an adult who understands both fiscal and monetary policy. He writes the following in his new book:

    Greenspan: Failure to Solve Deficit Problem Could Spark Financial Crisis

    “Unconstrained deficit spending” represents the United States’ No. 1 domestic economic problem, former Federal Reserve Chairman Alan Greenspan writes in a new book, Politico reports.

    • Ginny says:

      September 26, 2013 at 7:53 pm

      You know that left-wing publication, Forbes? Well, here is their headline on a recent article—WASHINGTON, DC - SEPTEMBER 13
      Greenspan’s Epic Incompetence:
      If you read anything this year, read this. It is an article by Bill Black,  a former financial regulator, that provides stunning new insights into former Fed chairman Alan Greenspan’s incompetence.
      Posted at the website Naked Capitalism, the article makes dozens of devastating points which have hitherto received little or no attention in the mainstream press. Here are a few of Black’s points that can be succinctly summarized.
      * Greenspan had a remarkable pre-history in the mid-1980s as a de-facto lobbyist for Charles Keating, the crooked financier responsible for the biggest fraud in the history of the S & L industry. Greenspan was then a consultant and in that capacity helped enlist the so-called Keating Five – the five top politicians most heavily implicated in helping the Keating scam (they were all senators – Alan Cranston, Dennis DeConcini, John Glenn, John McCain and Donald W. Riegle, Jr.).
      How The Government Created A Financial Crisis Peter Ferrara Peter Ferrara Contributor
      Lest We Forget: Why We Had A Financial Crisis Steve Denning Steve Denning Contributor
      * Greenspan opposed attempts by Brooksley Born, chair of the Commodities Futures Trading Commission, to crack down on fraud.  Greenspan allegedly told Born that there was no need for a law against fraud. Greenspan was such a true believer in the efficient markets hypothesis that he apparently genuinely believed that market action alone would quickly prove an effective prophylactic against fraud. Black comments: “Greenspan, with the rabid support of the Rubin wing of the Clinton administration, along with Republican Chairman of the Senate Banking Committee Phil Gramm, crushed Born’s effort to regulate credit default swaps (CDS). The plutocrats and their political allies deliberately created what’s known as a regulatory black hole – a place where elite criminals could commit their crimes under the cover of perpetual night.”
      * Greenspan refused to send examiners into banks to check out reports that their books were full of so-called liars’ loans.Such loans all but wiped out the U.S. banking system, and proved particularly toxic for Bank of America BAC . . . Citigroup, WellsFargo.
      Black’s conclusion is devastating: “Alan Greenspan had no excuse for assuming fraud out of existence, and his exceptionally immoral position on fraud and regulation proved catastrophic to America and much of the world.”
      While many will consider the word “immoral” is going too far, another word Black uses elsewhere seems to fit: wacky. It is fair to say that Greenspan emerges as probably the biggest – and most dangerous – fool in American financial history.

  • Mike Downing says:

    September 27, 2013 at 8:58 am

    Ginny: Well done! Saul Alinsky would be proud of you for going off topic and denigrating a monetary & fiscal expert..

    Let me remind you that the topic was “Worried about a federal shutdown?” and the reason for it being our ever increasing federal debt. A shutdown in our federal government strikes fear in liberal progressives. I believe you are fearful because the public will find out our lives will not change with this federal government shutdown. Your gig will be up…