Mick Mulvaney has emerged as the key obstacle in the next government shutdown fight
Congress is drawing closer to the moment where they’ll need to reset the “Number of days since the threat of a government shutdown” sign back to zero. And as an added bonus, the next shutdown crisis may come alongside a debt ceiling crisis.
According to the Washington Post’s Erica Werner and Seung Min Kim, Republicans in the Senate are currently “struggling to reach an agreement on a path forward on critical budget and spending issues,” with Senate leadership eager to get a bipartisan deal passed that would provide funding to keep the government running.
That deal will need to be secured by October 1, 2019, in order to forestall another shutdown. Around the same time, Congress will need to raise the debt ceiling to prevent a slew of additional crises. Following that, Congress will have to then move to figuring out “how to lift austere budget caps that will otherwise snap into place and slash $125 billion from domestic and military programs.”
The zero hour, then, is still several months away. But as Sen. Richard Shelby (R-AL), who chairs the Senate Appropriations Committee tells the Post, “We’re negotiating with ourselves right now.”
According to the Post, acting chief of staff Mick Mulvaney has emerged as the proverbial rock in the road. While Senate Majority Leader Mitch McConnell has nominally secured the go-ahead from President Donald Trump to start forging the necessary agreements in his caucus, which from there can be used as the platform for negotiations with Democrats, who currently control the House, “tensions” and “frayed relationship[s]” between Mulvaney and his GOP fellows in the Senate have slowed the process.
Mulvaney, who served in the House as a member of the House Freedom Caucus before his time as a member of the Trump administration, has historically fought for a level of budget austerity that leaders in both parties have considered to be a bridge too far. And as one anonymous GOP Senate aide tells the Post, “The problem with Mulvaney is sometimes he forgets he’s a staffer now, so he’s looking to execute on his own vision instead of the president’s, and that slows down the process.”
Earlier this year, loggerheads between branches and parties led to a five-week long partial shutdown of the government. According to estimates, this resulted in an $11 billion loss to the economy due to lost output, an estimated $3 billion of which was likely permanent. Forbes’ Niall McCarthy estimated that the after effects of the shutdown were “expected to make the U.S. economy 0.02% smaller than expected in 2019.”
If anything, however, the costs of raising the debt ceiling — an arcane process that simply amounts to Congress agreeing to honor the debts that have already been baked into the cake from previous legislative sessions — are even more dire. The failure to do so can send signals to creditors and shake the foundations of the economy. The adverse effects of failing to raise the borrowing limit are ably summed up by the Washington Post:
If Congress does not act and Treasury runs out of money, which is forecast to happen sometime in late fall, Treasury would be unable to pay all of its bills on time, which could lead to a default on the government’s obligations, a spike in interest rates, a surge in unemployment and a stock market crash. Fitch Ratings warned earlier this year that a shutdown coupled with a battle over the debt limit might damage the country’s Triple-A credit rating.
In the past, the periodic need to raise the debt ceiling was greeted by lawmakers as the opportunity to do a bit of performative grandstanding in the service of complaining about an ideological opponent’s spending priorities, with occasional members casting protest votes against the measure — all carefully stage managed to avoid actually breaching the debt limit. In recent years, however, Congress has edged closer and closer to becoming a looming disaster as lawmakers have adopted a new strategy around bargaining over the debt limit, setting the stage for high stakes confrontations under the threat of a catastrophic credit default.
Thus far, Congress has always managed to avoid setting this tilt-a-whirl of economic destruction in motion. Once again, however, Mulvaney looms as a wild card. In a 2010 interview with The Hill, he pooh-poohed the idea that breaching the debt limit was much of a big deal. “I have heard people say that if we don’t do it it will be the end of the world,” he said at the time, adding, “I have yet to meet someone who can articulate the negative consequences.”