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Saturday, February 26, 2011

The Government shutdown -- an Update

There is not going to be a government shutdown when funding runs out next week. Instead there will be a continuing resolution to fund the government for two more weeks on the terms proposed by the GOP. Here's why: the Republicans are proposing a $4 billion cut to the budget as the price for a two week extension of spending. That is a cut that keeps them on track for their total target for spending cuts. Normally, one might think that the Democrats would oppose this, but they cannot. The Democrats are boxed in. The nature of the $4 billion cut proposed by the Republicans has finally made its way into the press. According to the New York Times, the $4 billion is composed of earmarks that still remained in the budget together with certain programs that even president Obama propsed to cut. There is no way that the Democrats will shut down the government in order to preserve some earmarks or programs that even Obama wants to drop.

Let's hope that during the two weeks that follow, the Democrats in the senate actually come up with their own plan or, better yet, sign on to the House plan (admittedly unlikely). For the last year, the Senate Democrats have done nothing to bring sense to the budget. It's not that they took bad steps; they just ignored the issue entirely. Now they cannot. In two more weeks, the GOP can come forward with another $4 billion cut for still two more weeks. There are enough items to get another $4 billion that the Democrats will not be able to oppose. Indeed, that could probably be done a third time. Imagine how it will look to the public if the Senate Democrats make a big point of opposing the cuts on the fourth two week extension. They will look foolish and opportunistic. In my opinion, the GOP strategy is quite good.

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