Senate Majority Leader Harry Reid said the agreement that ended the government shutdown Wednesday was “historic.” That is a gross overstatement.
The agreement is nothing more than another giant swat of the can of fiscal responsibility down the dusty road of time. The government will be kept running until Jan. 15. The nation’s bills will be paid until the next debt-ceiling crisis, which now is scheduled around Feb. 7. The Obama administration will pay more attention to who qualifies for subsidies under the Affordable Care Act.
But the nation is no closer to a long-term budget plan, and no closer to resolving the basic philosophical differences among liberals, conservatives and the far right, than it was before the government partially shut down at the start of the month.
Tea party Republicans, Utah Sen. Mike Lee among them, ought to ask themselves what exactly they accomplished by this stunt. They started by aiming to defund Obamacare — something for which they lacked the votes. They ended up with a small concession, instead.
Reid said the agreement calls for budget negotiations between the House and Senate on a long-term budget plan. That sounds suspiciously like the “supercommittee” that was set up the last time the nation had a showdown over raising the debt ceiling. That effort failed, although it did result in some modest cuts from the growth of some discretionary budgets — a minor adjustment known ominously as sequestration.
But what the latest partial shutdown did accomplish was a short-term glitch in the nation’s economic health, which wasn’t exactly robust to begin with. The Federal Reserve issued a Beige Book report on Wednesday, which pulls data from surveys of the 12 Federal Reserve districts. It shows businesses skittish about the impacts of the debt-ceiling showdown, which made them more cautious.
But beyond the effects of the shutdown, the report also gives strong indications that businesses are reluctant to hire, and are in fact limiting the hours of their workers, in response to the Affordable Care Act, or Obamacare. The program has built-in incentives for businesses to hire part-time, rather than full-time, workers. It also contains incentives for some businesses to drop the health coverage of their employees and let them use Obamacare’s health exchanges, instead.
Ironically, Obamacare’s shortcomings, and its disastrous rollout, were obscured by the partial shutdown that was intended to destroy it.
Two lessons are apparent. One is that despite the partisan and quixotic nature of the shutdown, Obamacare indeed comes with a host of unintended consequences that ought to be addressed and mitigated before they become a further drag on the economy.
The second is that the nation still has a long-term debt problem centered on the runaway growth of entitlement programs and an archaic, indecipherable and ineffective tax code. Neither has been addressed in any meaningful way despite years of fiscal cliffs and other dire, manufactured crises.
It does little good for the nation to wander from crisis to crisis without a serious effort to tackle the real issues. Any serious observer can see the solution will require inconvenient reforms and revenue increases, requiring compromises from all sides.
The just-completed partial shutdown, by contrast, had all the strategic finesse of World War I trench warfare. We’re glad it has ended, and we hold out a glimmer of hope that the nation’s leaders now will resolve themselves to serious negotiations that include concessions, compromise and political courage.
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