As a federal budget economist, I typically analyze budget fights in the context of competing economic and fiscal approaches, and then define what I consider to be the optimal policy. However, the current government shutdown debate lacks any coherent policy explanation. Nor is it truly about fiscal or economic policy at all. It is purely political theater driven by a small handful of Republican House lawmakers who are being called out by their own colleagues for self-promotion and populist positioning.
Congressional Republicans claim that this fight is about reining in budget deficits that approach $2 trillion this year and are barreling toward $3 trillion a decade from now. Yet they propose no changes to the Social Security and Medicare shortfalls that are overwhelmingly driving projected deficits. Nor are they proposing significant reforms to other mandatory programs, defense, or veterans’ benefits. Instead, they are focusing entirely on a 10 percent sliver of spending known as non-defense, non-veterans discretionary spending. Yes, every spending cut counts, but even achieving the House objective of cutting this spending by 25 percent would merely reduce the deficit a decade from now from $3 trillion to $2.8 trillion. Lawmakers who are serious about deficits would also address the 90 percent of spending that is actually driving the red ink.
Similarly, Republicans seem to fight runaway spending only when a Democrat is in the White House. Back in 2017-2018, when Republicans controlled the House, Senate, and White House, they hiked discretionary spending by 13 percent in one year. Now Republicans want Democrats to agree to spending cuts that even the Republicans themselves refused to consider when they controlled the government.
Regardless of the spending targets, government shutdowns are a gimmick. If any of the 12 appropriations bills that fund discretionary spending are not enacted by the October 1 fiscal new year (and if no continuing resolution keeps the programs running while lawmakers continue negotiation), then some of those programs would shut down until the bills are enacted.