The U.S. government shutdown has finally come to an end after 43 days that resulted in thousands of flights being cancelled or delayed, food aid benefits for millions of Americans being jeopardized and hundreds of thousands of federal workers being furloughed.
But the question is: Which party bears responsibility for this shutdown? Let’s look at the facts as to who bears responsibility, not the misleading rhetoric.
First, the shutdown’s genesis resulted from the Congress’ inability to timely pass the required 12 appropriations bills necessary to fund the government for the next fiscal year that began on October 1. Neither party has been timely in passing a budget: 1997 was the last time that Congress passed a budget on time.
Accordingly, on September 19, the House Republicans passed a continuing resolution to temporarily fund the government at current levels until November 21 to allow more time for budget negotiations.
Senate Democrats, however, refused to support a bill that would have allowed the government to remain open during negotiations, instead conditioning their vote to keep the government open only if the “temporary” additional tax credits for Obamacare that had been enacted during the COVID pandemic were extended.
According to the Cato Institute, these “subsidies cover health insurance premiums for the roughly 7% of Americans who use the government-run Obamacare insurance marketplace.” The Cato Institute estimates that approximately one-third of these enhanced subsidies went to people with incomes above 400% of the poverty level, or above $62,600 for a single person.
In short, in return for keeping the government open during budget negotiations, Senate Democrats insisted that Republicans first capitulate on an item that was part of those budget negotiations.
Moreover, extending these “temporary” subsidies for Obamacare was a significant budget item over which to condition keeping the government open. The Congressional Budget Office has recently estimated that permanently extending these enhanced COVID-19 subsidies for Obamacare would increase the U.S. budget deficit by $350 billion over the next 10 years.
According to the Economic Innovation Center, this additional cost is more than Congress would spend on either the FBI, the national parks service, NASA or the Environmental Protection Agency (EPA) over the next 10 years.
More critically, even without the cost of these enhanced subsidies, the U.S. is already on track to run a deficit of $1.8 trillion this year and a public debt of 124% of its entire Gross National Product — which is higher than the debt immediately after World War II.
Millennials and Generation Z should understand that they will end up paying for this financial irresponsibility via future taxes, so they need to think carefully about supporting the extension of “temporary” subsidies for insurance policy enhancements that they do not need. More on that in a moment.
In short, Senate Democrats’ insistence on continuing what were intended as temporary subsidies during a pandemic as a condition for reopening the government after the pandemic had ended is pure extortion, that is, it seeks to obtain an objective “by coercive means.” Senate Majority Leader John Thune even offered Senate Democrats a vote on extending the Obamacare subsidies as part of a deal to end the shutdown, which Senate Minority Leader Chuck Schumer rejected as insufficient.
However, on November 9, eight Senate Democrats ultimately agreed to end the filibuster in return for a vote on the tax credits in December. This deal has nonetheless been criticized by those who insisted on their way (enact the tax credits now) or the highway (a continued shutdown). Among those who took the “my way or the highway” approach were House Minority Leader Hakeem Jeffries, Representative Ro Khanna and Gov. Gavin Newsom, who called the deal to end the pain from the shutdown “pathetic.”
However, there is a more responsible route to address the rising cost of Obamacare premiums than extending temporary tax credits enacted because of the pandemic: Agree to the formation of a bipartisan commission of respected elder statesmen to propose measures to reduce the costs of Obamacare, which would be subject to an up-or-down vote.
These negotiations can include measures that would permanently reduce the costs of Obamacare without costly subsidies that will burden the Millennials and Generation Z. As Pacific Research Institute’s Sally Pipes has observed, Obamacare premiums are expensive because Obamacare mandates benefits for every policy regardless of what the purchaser needs or wants, sets a rigid medical-loss ratio and imposes other inflexible requirements.
In that connection, keep in mind that Obamacare was passed without the careful vetting that would have ensured that it could live up to its formal name: “The Patient Protection and Affordable Care Act.” (Italics added.) Instead, as then Speaker Nancy Pelosi argued, “We have to pass the bill … so that you can find out what is in it — away from the fog of the controversy.” (Italics added.) In short, this massive piece of legislation was not carefully written, as one Supreme Court opinion confirms and would have benefitted from more deliberation.
Opening the government and fixing Obamacare is the right call, not wrapping it with an expensive bandage.
Daniel M. Kolkey served as counsel to Governor Pete Wilson, is a lecturer at UC Berkeley Law School, and is on the board of Pacific Research Institute.