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The Looming Government Shutdown

February 22, 2011 - by Donny Shaw

Congress may not be in session this week, but the negotiations on how to fund the government are continuing. At this point, however, we’re still looking at two sides that disagree and are unwilling to budge — a Democratic Senate that wants to pass a clean short-term continuing resolution to forestall a government shutdown until the year-long budget can be worked out, and a Republican House that will go along with a short-term solution, but only if it includes cuts. The most likely scenario still seems to be a government shutdown.

Some quick background: the current continuing resolution funding the government expires on March 4, just five days after Congress is scheduled to reconvene. The House has passed a new year-long CR last week, including at least $61 billion in cuts from the 2010 budget. But the Senate has been held up for weeks by an open amendment process on a non-controversial FAA bill and hasn’t even started debating their continuing resolution, let alone conference committee negotiations between the two chambers.

Everyone involved agrees that the best course of action right now is a two-week or month-long CR to keep government services alive and government employees employed while a longer compromise is being worked out. As Dave Dayen notes, the House Republicans and Senate Democrats are probably about $4 billon apart on the level of spending authority they want in a short-term CR. That’s about 0.1% of the total annual budget, but the politics involved mean that it’s enough to threaten a government shutdown.

Furthermore, if the government does shut down, it will ultimately cost the government money, not save money. As ABC reported yesterday, the last government shutdown, which was for 5 days in 1995, ended up costing $750 million.

So, what’s going to happen? Some anonymous aides are suggesting that a deal will be struck and a shutdown will be avoided. Others are saying that that’s not true. Ridiculous as it may seem, it’s hard to see Congress resolving this by the March 4th deadline. The White House seems to think so too — they’re drawing up plans to minimize the impact on government services should the shutdown occur.

Budget Committee Chairman Rep. Paul Ryan [R, WI-1] is pictured above.

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