Alexander Hamilton won in the end. As Treasury Secretary in the 1790s he championed an array of “internal” taxes to supplement federal revenues from import tariffs. Thomas Jefferson despised Hamilton’s internal taxes as assault on liberty, and when elected in 1800 he made sure that they were abolished.
It’s looking like it will take a week or more for Republicans and Democrats to reach an agreement to “reopen” the federal government. Regardless, with each passing hour a resolution necessarily becomes closer at hand because a so-called “government shutdown” effectively means that a budgetary impasse in our two-party dominated system has reached the end stage.
A benefit of the government shutdown may be that it slows the stream of waste and bad behavior flowing from the federal bureaucracy. Catching up on my reading, I noticed these items in just the last few days of the Washington Post:
All eyes are on the government shutdown battle over Obamacare. Here are a few thoughts:
Word on the street is that today House Republicans will pass a bill that would keep non-essential government functions open until mid-December, delay ObamaCare for one year, but not block the illegal ObamaCare exemption President Obama’s Office of Personnel Management granted to members of Congress and their staff. If Republicans fail to include language blocking that exemption, they truly deserve the moniker of The Stupid Party.
My recent paper on the rising cost of Social Security Disability Insurance is proving to be timely.
Senator Ted Cruz’s filibuster was impressive. Naysayers claim that it was pointless because Obamacare won’t be defunded this year with a Senate and White House controlled by Democrats. But at a minimum, Cruz and supporting senators have highlighted the huge flaws in the health law and reminded everyone of its unpopularity. If Republicans actually want to repeal the law—as they all say they do—then they need to take every opportunity to hammer away at it.
Commenting on the federal budget the other day, House Minority Leader Nancy Pelosi said “the cupboard is bare. There’s no more cuts to make.”
The possibility for a government shutdown should policymakers fail to reach an agreement on spending by October 1 is the topic du jour in Washington. The last time a government shutdown occurred over a budget impasse was fiscal year 1996 when Democratic President Bill Clinton went to the mat with a Republican-controlled Congress. There were actually two shutdowns that year, with the second one lasting a record 21 days. Prior to that, brief shutdowns were a fairly regular occurrence.
As policymakers begin fighting over this year’s appropriations, the Congressional Budget Office has released a long-term projection that puts today’s budget battles in broader context. The federal government is in the most unique and dangerous fiscal situation that it has ever been in during peacetime.