Government Shutdown: Nobody Wanted It, But Here We Are Anyway



“If the United States government shuts down tonight and our economy takes a hit, it will be because House Republicans let it happen,” the White House wrote in a blog post on Monday. “Instead of allowing a simple yes or no vote on a bill that funds the government for a few more weeks, the government that these Republicans were elected to serve will close down.”

Indeed, as many feared and expected, policymakers failed to pass a continuing resolution on Monday night, and the U.S. government has begun the process of idling 800,000 workers and placing nonessential operations into hibernation until further notice. The White House has placed the mantle of responsibility on the shoulders of the GOP, which controls the House of Representatives, while Republican Party has in turn placed blame on the Obama administration and the Democratic Party, which controls the Senate.

The American public, fairly enough, blames both parties more or less evenly. Survey data published by Pew on September 23, just as the debate was really getting hot and the threat of a shutdown was taking shape, show that 39 percent of Americans would blame Republicans, while 36 percent would blame the Obama administration; 17 percent of respondents responded that both parties are equally to blame.

But at the moment, assigning blame feels like a bad allocation of public resources. The issue will no doubt rear its ugly head in the 2014 midterm elections, and it is by voting that people can most effectively articulate their dissatisfaction with the way one side or the other handled the issue. Suffice it to say that even though many Americans do not support the Affordable Care Act (47 percent, according to a national survey conducted by Quinnipiac University), most (72 percent, according to the same survey) do not agree that shutting down the government is the right way to go about dealing with it.

To sum it up: Nobody wants to be here, but here we are anyway.

The full scope of the damage the shutdown will cause is hard to quantify and depends largely on how long the shutdown lasts. The White House suggests that a one-week shutdown could cost the economy as much as $10 billion, and that 800,000 federal workers will be furloughed for the duration of the standoff.

If the lights are out for just a few days, Americans can expect to see just a few basis points shaved off third-quarter gross domestic product growth, and perhaps a few ghostly echoes down the road. A few weeks, though, and the damage to GDP moves from being measured in basis points to full percentage points. Moody’s chief economist Mark Zandi suggests that a three- to four-week shutdown could reduce third-quarter GDP growth by as much as 1.4 percentage points.

So what are the next steps?

Policymakers get their act together and turn the lights back on — we hope. This, though, has become enormously difficult, with each side backed so far into a partisan corner that politicians risk having their heads cut off by their own party if they step out and reach across the aisle.

Leaders in the House have ostensibly gotten the ball rolling on a series of meetings, but it’s unclear how productive these will be. Reports indicate that House Speaker John Boehner (R-Ohio) and President Obama spoke briefly on the phone Monday evening but failed to find any common ground.

With a little bit of irony, the health care exchanges mandated under the Affordable Care Act will still open, despite the shutdown.

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