What Makes This Standoff Worse Than Other Government Shutdowns

(Bloomberg Businessweek) -- As the record-long government shutdown barrels into its second month, you may have noticed that this stalemate differs from previous ones. Not only is it dragging on longer and causing more economic damage, it’s also resisting the usual forces of resolution. Past shutdowns feel almost quaint by comparison.

There have been 10 since 1980, and two already during Donald Trump’s brief presidency. By now, a familiar process has arisen through which these deadlocks resolve themselves: the combination of cable news clocks, tales of hardship, besieged lawmakers, and worsening poll numbers ratchets up pressure until one side or the other capitulates. That was the case with last year’s Democrat-led shutdown, meant to force progress on the Deferred Action for Childhood Arrivals program, and also with the Republican one in 2013 that sought to block the Affordable Care Act.

What Makes This Standoff Worse Than Other Government Shutdowns

It’s not the case this time, at least not yet. From the beginning, the Trump-led shutdown over a border wall has been different. It effectively kicked off on live television when Trump staged a showdown with incoming House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer and was then gulled into taking responsibility for what was about to happen. “I will be the one to shut it down,” Trump boasted to a grinning Schumer. “I’m not going to blame you for it.”

When government funding expired at midnight on Dec. 21, CNN and MSNBC rolled out the usual “shutdown clock” and reporters scrambled to find victims—not hard when 800,000 federal workers have had their paychecks halted. Furloughed workers and their families are lining up for whole city blocks to collect donated groceries. From airports to federal prisons, absenteeism is soaring. “This is uncharted territory, and with increased callouts citing financial hardship, this could have a compounding effect and force contingency plans at airports nationwide,” says Michael Bilello, a spokesman for the Transportation Security Administration.

The economic damage has begun to register, too. The shutdown has crimped forecasts across Wall Street and brought on “emerging headwinds” that New York Federal Reserve President John Williams says could shave a full percentage point from first-quarter growth. The University of Michigan’s latest consumer sentiment index dropped to the lowest level of Trump’s presidency. Even the White House is sounding an alarm. Kevin Hassett, chairman of the Council of Economic Advisers, who initially likened the furloughs to “a vacation” that would leave workers “better off,” reversed track on Jan. 15 and said the council’s own estimates show the stalemate reducing growth by 0.13 percentage point for each week it drags on. A week later, he warned of zero growth if the crisis extends through March. “If the government shutdown continues,” said Torsten Slok, chief international economist at Deutsche Bank, “it could cause a recession.”

Despite all this, Trump doesn’t sound as if he’s about to relent. His poll numbers have worsened, but not dramatically. Members of Congress feel no compunction about leaving town. The president apparently even exhausted the cable news industry’s capacity to sustain a ratings-boosting atmosphere of alarm: CNN’s shutdown clock has vanished, while MSNBC, loath to give up entirely on a crisis that should be hurting the president, has swapped its clock for a more sedate calendar.

There can be no question we’ve passed into what a recent Goldman Sachs note calls “an era of political polarization, uncertainty, and dysfunction.” With Trump’s presidency entering Year 3, that hardly seems like breaking news. But as this crisis indicates, the dysfunction is different now. The virus has mutated.
There are two main reasons this shutdown has become a little scary—and together they should cause us to shift our appraisal of U.S. politics to something even more dire than it was before the showdown began. The first way this shutdown is distinct is that the president himself engineered it. Previous ones were always forced by the legislative branch to try to extract concessions—legal status for immigrants, reduced health-care spending—from a president of the opposing party. Such hostage-taking usually proved futile and ended in disappointment.

The trouble with a shutdown orchestrated by the legislative branch is that any U.S. president has formidable tools to heighten the disruption Congress causes—and can be blamed for. In 2013, for instance, Barack Obama closed national parks and erected barriers along the National Mall, frustrating tourists who’d come to visit the war memorials. Government agencies stopped publishing pricing data for livestock and commodities, throwing a wrench into those markets. By leveraging public anger over halted services against his Republican antagonists, Obama ensured the government wouldn’t be shuttered for long.

Trump hasn’t had to contend with the kind of pressure that soon came to weigh on prior instigators. In fact, rather than deploy his powers to dramatize the disruption, he’s used them to an astonishing degree to mitigate its effects on the groups and industries he deems most likely to spark a backlash. His administration has ordered more than 400,000 federal employees back to work without pay to inspect planes, monitor food safety, and facilitate the sale of offshore oil-drilling rights. When it became apparent that the Internal Revenue Service wouldn’t be able to process tax returns, Trump avoided the national furor of a middle class denied its refunds by forcing 46,000 IRS employees— salary-free—to do the paperwork. When the trade group representing farmers complained, the Department of Agriculture announced it would bring back about 2,500 Farm Service Agency employees to help with loans and tax documents. It’s not at all clear any of this is permissible. Environmentalists have complained about the legality of the Bureau of Land Management issuing at least 153 drilling permits since the shutdown began. The National Treasury Employees Union is suing the government for making IRS employees work without pay, arguing that the order falls outside the scope of activities permitted during a shutdown. “This administration is being creative in its ability to break the law and test the boundaries,” says Sam Berger, a senior adviser at the Center for American Progress who once worked for Obama.

Regardless, Trump has largely succeeded—for now—in shielding most voters from inconvenience. A Politico/Morning Consult poll on Jan. 16 found that while there’s widespread awareness of the shutdown, 66 percent of voters say there’s been “not much” or “no” impact on them or their families.
The second distinguishing feature of this shutdown is that it hasn’t produced the kind of immediate backlash that compels both sides to return to negotiations. A close look at public opinion surrounding the impasse and its central issue shows why: Post-midterm elections, the two parties have grown so polarized, and voters so tribal, that there’s no meaningful “center” that Trump or Democrats risk losing. While Trump’s overall popularity has drifted to the lower range of his presidency, at around 40 percent, Republicans haven’t abandoned him. A Jan. 15 Quinnipiac University poll found that the president’s approval with Republicans has increased 4 percentage points, to 86 percent, over the past month. That’s buoyed his overall rating. “Despite very bad grades on honesty, empathy, leadership, and fitness to serve, President Donald Trump’s granite-strong base keeps him above 40 percent,” says Tim Malloy, assistant director of the Quinnipiac poll.

But the real effect is that voters’ feelings toward Trump across the political spectrum have intensified during the standoff. Among all voters, Quinnipiac found, 33 percent say they “strongly approve” of him, while 50 percent “strongly disapprove.” That doesn’t leave many people in the middle.

What Makes This Standoff Worse Than Other Government Shutdowns

The hollow center is even clearer in an electoral context. There’s no longer a bloc of rural, blue-collar Democratic districts in the House whose representatives would pressure Pelosi to strike a deal funding Trump’s wall—recent elections made them extinct. The midterms also wiped out most Republicans from educated suburban districts who might have crossed over to help Democrats end the impasse. A few woolly mammoths still roam Capitol Hill: GOP Senators Cory Gardner of Colorado and Lisa Murkowski of Alaska, both facing reelection next year, have voiced reservations about Trump’s ploy and say they’re willing to open the government without wall funding. But they won’t make much difference.

As for Trump’s border wall, it’s grown more popular. The latest Washington Post-ABC News poll found 42 percent of respondents say they support it, up from 34 percent a year ago. But that puts little pressure on Democrats, because the increase came mostly from Republicans, whose support has grown larger and more intense. That intensity is mirrored in the opposition, which has allowed Pelosi and Schumer to insist the government reopen before negotiations recommence. “The wall has now morphed into a moral issue for Democrats,” says Frank Sharry, executive director of the pro-immigrant-rights group America’s Voice. “The wall has come to symbolize Trump’s racism and xenophobia.”
As the late economist Herbert Stein famously remarked, “If something cannot go on forever, it will stop.” At some point, the standoff will end because the economic damage will compound to an unbearable point. For all its symbolism, Trump’s shutdown has always been a big fight over a small number—the $5.7 billion he’s demanding for his wall is about one-tenth of 1 percent of the total federal budget.

Whatever the resolution, whenever it comes, it shouldn’t obscure the alarming dysfunction the standoff has exposed. Nor should the future implications go unheeded. In the past, the party that forced a shutdown always relented when the broad middle turned against it. Trump has already broken this mold, since, on the matter of a U.S. taxpayer-funded border wall, he never had the middle to begin with. He’s not acting at the behest of his party, either. Senate Republicans already voted unanimously to fund the government without wall money and went weak-kneed only at his insistence. Rather, Trump’s decision to close the government was driven by a desire to fortify his self-image as someone able to bend Washington to his will on the matter of greatest importance to his staunchest supporters: immigration. The fallout of this Fox News fantasy doesn’t appear to weigh on him.

Perhaps he’ll manage to secure funding by agreeing in the end to the obvious deal of trading DACA protections for it. But what if he doesn’t? Does anyone imagine Trump will be satisfied to run for reelection with his central promise unfulfilled? Or will he seek out a new point of leverage, one that Democrats can’t exploit as easily as the current shutdown?

On March 1 the U.S. debt ceiling will be reinstated. By late summer the Treasury Department’s “extraordinary measures” will be exhausted and the government’s borrowing authority will run out. House Democrats have already changed their rules to make raising the debt ceiling easier. But ultimately, it’s up to Trump. Let’s say he’s forced to make a humiliating climbdown in the current impasse. What’s to stop him from, say, refusing to raise the debt limit without wall funding in return?

It wouldn’t be fear of alienating centrist voters, or damaging political norms, or making a move that’s economically counterproductive, as the free traders in his administration can wearily attest. Maybe a plunge in the Dow causes him to relent. Or maybe it doesn’t. Every day that the current stalemate drags on is a new measure of Trump’s stubborn force of will—and a reminder that the old safeguards no longer apply. —With Jennifer A. Dlouhy, Christopher Flavelle, Hailey Waller, Anna Edney, Alan Levin, Laura Davison, and Francis Wilkinson

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

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