Congress has just days to keep the federal government from grinding to a halt, and a last-minute deal seems increasingly unlikely. The problem is that lawmakers need to pass a dozen appropriations bills – or a single continuing resolution – by Sept. 30, 2023, in order to keep the government’s lights on. But a key group of House Republicans is refusing to pass anything without steep spending cuts. No bills, no government – at least for a few days or weeks, anyway.

While fiscal discipline has long been the rallying cry for shutdown supporters, the tactic isn’t necessarily effective at reducing the government’s deficit.

I’ve been following efforts to shut down the U.S. government for one reason or another for more than 40 years, first from various perches at the Congressional Budget Office, then at the National Governors Association, and now as a professor of public policy. History shows that shutdowns are counterproductive – at least as measured by their own defenders’ goals. Fortunately, the past also provides a proven way to reduce the deficit, which I agree is a laudable goal.

Deficits are too high

When House Republicans say America’s finances are in bad shape, they do have a point. The deficit, currently estimated at US$1.5 trillion, and debt held by the public, estimated at $25.8 trillion, are both dangerously high.

Why is the status quo so risky? For one thing, large deficits are inflationary and put pressure on the Federal Reserve to raise interest rates. For another, interest on public debt is now estimated to be $663 billion a year, which is slightly over 10% of total spending – a huge fiscal burden.

Finally, and most importantly, at some point individuals and foreign countries may dump U.S. treasury bills and bonds on the market because of a loss in confidence. That would make interest rates spike and could create a major economic collapse.

Because of these risks, members of the House Freedom Caucus have threatened to shut down the federal government on Oct. 1, the beginning of the next fiscal year, if they aren’t able to get big cuts to domestic discretionary spending.

Negotiations are further complicated by some House Republicans’ desires to add riders about the border and culture war issues to the must-pass spending bills, as well as the Biden administration’s request for $24 billion for Ukraine, which not all party members support.

Fighting the wrong battle

I would argue that now is the wrong time for Republicans to take a stand on reducing the deficit, for two reasons.

First of all, shutdowns don’t get results. The U.S. has had 21 shutdowns over the past five decades, three of which have been major. These have all caused real harm to the U.S. economy, but they haven’t led to the spending levels Republicans wanted.

What’s more, in each case, the public blamed Republicans for the shutdowns, polls show. Some historians have even suggested that the fallout from the weekslong 1995-96 shutdown contributed to then-speaker Newt Gingrich having to resign in 1998.

Second, the cuts Republicans are seeking aren’t all that significant. The bottom line is that they’re ignoring national defense and mandatory spending, which together represent 75% of total spending. The current effort aims only to trim domestic discretionary spending, which makes up a small and shrinking slice of the federal-spending pie – less than 15% in 2023.

At the same time, mandatory spending, including entitlements, totals nearly $4 trillion annually and is growing rapidly. So, even if Democrats agreed to the domestic discretionary-spending cuts advocated by the House Freedom Caucus, those savings would be overtaken by growth in entitlement spending – primarily Social Security, Medicare and Medicaid – within a year.

What’s more, any serious plan to reduce the federal deficit must consider increasing the $4.8 trillion of federal revenue. The House Freedom Caucus has expressed no interest in raising taxes.

The bottom line, in my view, is that the shutdown strategy is more about creating drama, publicity and campaign fundraising for certain lawmakers than it is about seriously reducing the deficit.

How to get results

While it’s never politically easy to cut entitlements or raise taxes, the reconciliation provision in the 1974 Congressional Budget and Impoundment Control Act was enacted specifically for this purpose. It allows entitlement cuts and tax increases to be incorporated into the same bill, which cannot be filibustered in the Senate and only needs a majority for passage.

Over the past 40 years, there have been six serious budget negotiations that resulted in deficit reductions. One in 2011, negotiated by then-President Barack Obama and House Majority Leader John Boehner, was likely the most successful from a fiscal perspective. When it was finally enacted, it generated $1.95 trillion in deficit reduction over nine years.

A similarly successful negotiation came in 1997 during the Clinton administration. Lawmakers cut national defense spending by $247 billion, nondefense discretionary spending by $273 billion and entitlements by $374 billion, with interest savings of $142 billion. They also reduced taxes by $220 billion, mostly for low-income individuals, which brought the net total to $816 billion in deficit reduction over 10 years.

In addition to those successes, there were four other negotiations in 1993, 1990, 1985 and 1983 that averaged over $400 billion in deficit reduction, albeit over different timelines.

These examples show that budget negotiations without threatening a shutdown can be effective at enacting major deficit-reduction plans into law. The one during the Clinton administration even led to the budget surpluses in the years from 1998 to 2001, the first surpluses since 1969.

History indicates that there are three major requirements for a successful budget negotiation. First, lawmakers must be seriously committed to the goal of deficit reduction. Second, everything needs to be on the table, including revenues, entitlements and national defense. Third, there must be trust among the negotiators.

Unfortunately, I don’t believe any of these requirements can be met today.

  • TehWorld@lemmy.world
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    1 year ago

    This shut down isn’t about spending. It’s monkeys throwing poop. They don’t care who they hit, they just want attention.

    • norb@lem.norbz.org
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      1 year ago

      It’s monkeys throwing poop. They don’t care who they hit, they just want attention.

      I am unabashedly stealing this line. Thanks.

  • flossdaily@lemmy.world
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    1 year ago

    The Republicans aren’t trying to win a budget war.

    The Republicans have ZERO interest in governing. What they want is power, and to hurt their enemies.

    They have no core principles. Remember that they ran with NO PARTY PLATFORM? Have you seen their presidential debates? They don’t have even the slightest understanding of reality. They are the dumbest, cruelest people ever.

    Republicans are a cancer.

  • HububBub@kbin.social
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    1 year ago

    History has shown that the best way to reduce a deficit is to elect a Dem president and the best way to increase the deficit is to elect a Rep president. Somehow that message doesn’t sink in with the voting public.

    • 0110010001100010@lemmy.world
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      1 year ago

      I mean, a substantial portion of the voting public willingly absorbs straight right-wing propaganda 24/7/365. When they consider Fox “news” as a leftist rag you know they are too far gone.

  • TheJims@lemmy.world
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    1 year ago

    Republicans don’t care about the budget… never did. Shutting down the government is purely a service to Trump and Putin. They’re willing to hurt America and Americans to serve their masters.

  • Rottcodd@kbin.social
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    1 year ago

    The bottom line, in my view, is that the shutdown strategy is more about creating drama, publicity and campaign fundraising for certain lawmakers than it is about seriously reducing the deficit.

    My plan, when I started reading this article, was to treat the author’s explanation of a better way to budget as just a speculative mental exercise, then respond to say that that was all well and good, but it didn’t matter because this isn’t really about budgets and deficits and fiscal responsibility, but… pretty much exactly what they then said right here.

    I’m not sure how to react to that. I was expecting the author to be just another naive policy wonk, so wrapped up in plans that they never noticed that the politicians who would have to enact it are just a bunch of lying, self-serving sacks of shit who are only interested in privilege and self-aggrandizement and couldn’t care less about actual policy. But apparently they know that and… went ahead and laid out a strategy anyway?

    • Overzeetop@lemmy.world
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      1 year ago

      I say that the budget reduction goal gets divided by 535 and each member of congress has to cut that much from their own district. If they miss their number, the amount short is removed from their congressional office staff budget. If that’s not sufficient, a randomly selected member from the opposite party gets to make the remainder of cuts from that district. DC, PR, and territories don’t require cuts because they have no representation.

      • halferect@lemmy.world
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        1 year ago

        But some districts are poor so cutting the same across the board would destroy some districts and not even be noticed by others.

  • spaceghoti@lemmy.one
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    1 year ago

    If they were serious about reducing the deficit, there are some real world, practical solutions that work every time like raising taxes on the 1%. They don’t actual care about the deficit. They want to take away public programs and benefits for the 99%. That’s all they care about, along with bullying the nation to keep power.

  • downpunxx@kbin.social
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    1 year ago

    With Trump, and by extension the entire GOP, staring down the barrel of 4 different Trump prosecutions, Republicans have no other way of trying to change the narrative, so of course they’re going to shut the government down, no matter the cost, or who gets hurt in the process, because racist power is all that matters to them, and all that has since the 1960’s.

    • Drusas@kbin.social
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      1 year ago

      Don’t neglect that it’s also about trying their damnedest to hurt the average person by cutting budgets and programs which help them.

  • queermunist she/her@lemmy.ml
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    1 year ago

    omfg libs, seriously, Republicans don’t give a shit about the budget. When will they fucking learn it’s all bullshit?!

  • Maeve@kbin.social
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    1 year ago

    Billary’s deficit reduction was a disaster for the working class, but let’s just ignore that.