Copyright guampdn
I was going to write a second column on AI. Then I realized that the day this column comes out, the federal government shutdown will tie for the longest in history. So AI will have to wait. This is the 14th shutdown since 1980 and the fourth to last multiple weeks. This does not happen in other countries. Occasionally, a Third World country goes bankrupt, but routine shutdowns caused by annual budget negotiations are an American specialty. Why does this keep happening? There are three big reasons. The separation of powers allows the legislature and executive to be controlled by different parties. The budget process separates tax decisions from spending, making impasses more likely. And the political polarization of the last 40 years makes the potential for impasse a reality. As we all know, the Framers wanted different branches of government to “check and balance” each other. So the executive and legislature are elected separately and negotiate to pass a budget. This makes a standoff possible, but not inevitable. None of the other G-7 countries has this system. (The G-7 are the seven largest rich democracies.) Most have parliamentary systems in which the executive has to have a majority in the legislature. If they cannot pass a budget, they resign and fresh elections are held. Even in France, which has a hybrid system, the prime minister has to pass the budget or resign. Still, other countries have separation of powers and legislative standoffs without regular shutdowns. The U.S. budget process which creates many more opportunities to bring the process to a halt, is a second reason. The U.S. requires separate bills for raising money and spending it. This stems from the fact that the Constitution deals with the two processes in different clauses and this is reflected in different congressional committees. A few countries influenced by the U.S., like the Philippines, do this, too. But it is rare. And completely irrational. And the U.S. makes it worse by having 13 appropriations bills handled by different committees, instead of one. In most countries, the budget is a single bill that contains both taxation and revenue proposals. The legislature votes on the package as a whole. By separating the two as the U.S. does, legislators find it easier to vote for lower taxes on one and higher spending on the other. Sure, other countries run deficits, too. But passing a single budget means legislators have to own it. The U.S. system makes it easier for members of Congress to pretend they aren’t doing it. And that causes infinite potential for mischief. Still, the U.S. had separation of powers and separate processes for revenue and appropriation for nearly 200 years before the first shutdown in 1981. So what happened? One thing that happened was a tax revolt by voters. It began in 1978 in California and Massachusetts and culminated in Reagan’s election in 1980. Reagan was elected on cutting taxes and increasing military spending. He also wanted to drastically cut domestic social programs. He got the first two but not the third, because Democrats controlled the House of Representatives. Shutdowns became an annual feature of budget negotiations but never lasted more than a couple of days. After a day or two, the president and the Democratic speaker, Tip O’Neill, would compromise. Deficits started to grow again. When economists talk about budget deficits, they don’t talk in dollars and cents. What matters is the deficit as a percentage of gross domestic production or GDP. The highest deficits as a share of GDP came during the Great Depression and World War II. Between 1945 and 1980, it rarely crossed 3% and was usually below 2%. After Reagan’s election, deficits were regularly above 3% and often crossed 4%, until Clinton. A Democrat, Clinton initially enjoyed large majorities in the House and Senate, the first time one party had controlled Congress and the White House since the 1970s. Clinton made raising income taxes, mainly on wealthy Americans, his first order of business. Taxes went up. Deficits started to shrink. But voters were furious and in 1994, Republicans won a majority in the House for the first time since Eisenhower. Republicans came in, intent on cutting social programs favored by Democrats. This resulted in the first truly long shutdown in 1995, lasting 21 days. Eventually, Clinton and the GOP compromised, enacting some budget cuts but less than Republicans wanted. Between the tax increases and the budget cuts, the budget was in surplus by the time Clinton left office. Then the cycle began anew. George W. Bush slashed taxes and raised military spending. Deficits soared. Obama came in with large Democratic majorities. There was a massive recession on, so the showdown didn’t happen until his second term when Republicans controlled the House. A shutdown of 16 days followed before the two compromised. And finally, there is Trump, who has presided over the two longest shutdowns, in 2018-2019 and now. Trump is also the only president to have a shutdown when his party controls both houses of Congress. This partly reflects Trump’s bare-knuckles negotiating style, which stiffens his opponents’ resolve as often as it makes them surrender. It also reflects Trump’s and the Republicans’ continued commitment to slashing taxes and social spending. Still, while it’s tempting to blame Trump, or the Republicans or the Democrats, depending on your affiliation, the real problems lie much deeper. The fundamental problems are voters wanting more in government services than they are willing to pay for, and a constitutional structure that turns that mismatch into paralysis. If we want shutdowns to stop, one of these has to change.
