Partial federal government shutdown ends but political impasse remains

Partial federal government shutdown ends but political impasse remains

MULTIBRIEFS
January 28, 2019

By Seth Sandronsky

Last Friday, President Trump signed a bill in effect through Feb. 15 that ends the 35-day partial federal government shutdown, the longest in U.S. history.

What is likely to or could happen over the next three weeks as border security talks between the president, GOP and Democrats proceed? What are the prospects for a resumed shutdown if both sides fail to reach a compromise?

First, what are the immediate ramifications as federal agencies closed five weeks and a day reopen?

We turn to Frank Knapp, head of the South Carolina Small Business Chamber of Commerce. “The (4.8 million) contract federal workers will not get any back pay,” he said in an email to MultiBriefs. “The (800,000) salaried federal employees being paid now will be very reluctant to spend on anything other than necessities for the next three weeks.”

Alan Chvotkin is counsel and executive vice president of the Professional Services Council, a trade group that represents federal government contractors. Speaking of the GOP and Democrats, “All sides have been very clear on their positions, from building a border wall to keeping the government open during negotiations,” he told MultiBriefs via phone. “I am hoping that the president and congress can find a set of solutions.”

Meanwhile, federal contractors are awaiting the resumption, if only until Feb. 15, to do business. The 35 days of unpaid inactivity, combined with the processes of the nine federal agencies resuming operations now, suggest that delays are inevitable. Is this a learning moment for the affected businesses?

The answer is yes, according to Chvotkin. “Companies could be better prepared for a resumed shutdown given the lessons they might have learned during the recent one.”

Dean Baker is a senior economist for Center for Economic and Policy Research (CEPR) in Washington, D.C. According to him, a second federal government shutdown is not likely.

“The last one was disastrous for Trump and the Republicans,” he said via email, “and they won’t go along with another one. I expect that they will come up with something that gives Trump a fig leaf on the wall. It’s hard to know what that will be, but it’s almost inconceivable the Democrats (who just regained the House) will give ground at this point.”

Alan Barber is the CEPR’s domestic policy director. “There is a high likelihood that no package presented will give the funding the president is looking for and he may well attempt to declare a national emergency, a misguided decision, but one he may pursue nonetheless,” Barber told MultiBriefs in an email interview.

Trump declaring a national emergency to sidestep Congress for border wall funding would surely face legal challenges. No doubt, the president and his advisors are aware of that for current and future reasons.

Consider, for example, the political fallout of a 2020 Democratic president declaring a national emergency over, say, climate change, to fund a policy of reducing carbon-emissions that are melting glaciers and causing climate chaos, including sea level rises. Such a political approach, perhaps a Green New Deal, would involve many moving parts and a challenge to the current energy status quo, economically speaking.

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