Unless House Speaker John Boehner, R-West Chester Twp., can persuade rebellious House GOP conservatives to drop their demand that federal financing for the 2010 health law be linked to a temporary spending bill, the government will partially close for the first time since 1996.
“It would be a disaster for us to shut the government down,’’ said former Republican Sen. George V. Voinovich of Ohio, who was governor at the time of the last shutdown. “It would just underscore what’s already out there, and that is that the U.S. is in deep trouble because it’s unable to get its act together and work together to solve problems.”
Congress and the White House have hovered on the precipice of a shutdown as recently as 2011. But some suggest that because the majority of current lawmakers have never lived through a shutdown, many don’t recognize its potential impact.
“They have to put their hands on the hot stove to see what happens,” said G. William Hoagland, a former Republican Senate Budget Committee staffer.
The threat of a partial shutdown is just one of two potential shocks that could rattle economic growth and hobble a stock market that has leaped to record highs this year.
By the middle of next month, Congress will have to raise the debt ceiling or the federal government cannot pay its bills. House Republicans are expected Friday to approve an increase in the debt ceiling, but they are likely to attach a number of amendments opposed by Obama — including approval of the Keystone Pipeline and a one-year delay in the health care law.
A failure to raise the debt ceiling “would send the markets crashing,’’ said Jim Manley, a former top aide to Senate Majority Leader Harry Reid, D-Nev. A steep market decline could damage the 401Ks that many older workers are counting on for their retirements, prompting a potential backlash, which most believe would be directed at House Republicans.
“If that happens, how ticked off are they going to be if they watch their investments tank for the third time in five years?’’ said Peter Fenn, a Democratic consultant in Washington.
Said Hoagland: “I’m a Star Trek guy, and we’re going where no man has gone before in this default situation.”
Hoagland said the Obama administration will have some flexibility in how it would implement a shutdown. While most federal government workers will likely be furloughed, the military most likely will not. Federal employees who deal with safety – air traffic controllers, federal prison guards, for example – would also likely be exempt.
And ironically, most elements of the health care law that is at the core of the GOP resistance would continue to go into effect; they’re entitlements and thus exempt.
Among those hardest hit by a shutdown are the same people who have felt the impact of the sweeping automatic budget cuts commonly called the sequester.
Civilian defense employees who faced six days of furlough this year because of budget cuts could see more. Head Start programs that saw staff cuts this year may have to close their doors when the government does.
Contractors already reeling by the budget cuts would feel another blow, said Deborah Gross, president of D. Gross Consulting and executive director of Dayton Defense, an organization of Dayton contractors.
“We’re at a point in America where we need to be as productive as we can be,” she said. “Right now we have a government that’s limiting our productivity….There’s just absolutely nothing good that can be said about a government that can’t get their job done.”
Already reduced research grants will be spent but not necessarily renewed, depending on how long a shutdown lasts. And anyone who deals with licensing – federal firearms licenses and passports are two examples – will have to hang on until the government opens its doors again.
“I think it hurts everybody,’’ said Rep. Pat Tiberi, a Republican from suburban Columbus. “The reality is you have people who aren’t thinking about the consequences’’ of a partial shutdown.
During the shutdown of 1995 and 1996, Congress retroactively paid those furloughed. Hoagland isn’t confident they’ll do so this time – Congress would have to pass a bill to pay them. “It isn’t a given,” he said.
Michael Gessel of the Dayton Development Coalition said if furloughed employees aren’t compensated, the region’s biggest hit could be economic. “In a best case scenario, the money will eventually come back to the region,” he said.
Then there are the less tangible impacts.
“People who travel to the Air Force museum and find it closed may not come back,” he said. “Companies that move to Dayton to take advantage of Wright-Patterson Air Force Base then get hurt by the shutdown may decide to target their efforts somewhere else.”
Those impacts, he said, “probably would not occur if the shutdown were short.”
Hoagland predicts that Congress will ultimately pass a short-term spending bill without changing the health care law, setting the stage for a contentious fight over the debt ceiling.
Using a government shutdown as a ploy to force the president to yield to the other party on one of his cherished programs is a risky political strategy, one many GOP veterans of Capitol Hill fear could backfire on the party.
“It didn’t work before,” said former Rep. David Hobson, R-Springfield, who was a House member in 1996. “And I don’t believe it will work now.”
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