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FRONT PAGE CONTRIBUTOR

A Rational Shut Down Strategy

In case you haven’t noticed it part of the federal government is now shut down. The Federal Aviation Administration’s budget is caught up in a disagreement between the House and Senate. The House has adjourned, except for pro forma sessions which prevent Obama from placing more commies in positions of power, which means the FAA will be unfunded until September.

As we approach yet another budgetary food fight when the current continuing resolution expires on September 30 what has happened with the FAA is instructive on how to reduce federal spending, including the elimination of agencies, without triggering a widespread government shutdown with uncertain outcomes.

Yesterday my colleague and fellow Marylander Daniel Horowitz posted a story on the shut down of the non-air traffic control functions of the FAA.

So what does this mean? About 4,000 or so FAA employees are furloughed, about $30 million in taxes and fees are uncollected each day, and airport construction work has come to a halt. The story is a convoluted one. Briefly told, the House is seeking to eliminate subsidies to rural airports outside Alaska and Hawaii. This is a small but significant battle as many unnecessary rural airports are unreasonably subsidized. The airport in Harry Reid’s district, for instance, receives subsidies to the tune of $3,700 per ticket. The Senate would allow many of these to remain. More importantly, the House seeks to keep the current rules for unionizing airport/airline employees while the Senate version would make it much easier for unions to win elections.

Carried to a logical conclusion this particular fight tells us a lot about how to rein in government spending.

I think it goes without saying that shutting down the federal government over a budget fight with the Senate or President is a losing strategy. I don’t subscribe to a lot of the interpretation of the 1995 showdown that claims it did the GOP no harm. If you lived through it, it was a divisive and destructive battle that did little to expand our base of voters and arguably gave Clinton a second wind just when he needed it most. More to the point, it is ineffective in several ways. First, it doesn’t save money. Historically, furloughed federal workers are paid retroactively once a budget or continuing resolution is passed. Second, it disrupts federal contractors, a lot of whom are small businesses. When the federal workforce is furloughed, contractors receive a “stop work order.” That means exactly what it says. For a university conducting federally funded research this means they can no longer monitor experiments or collect data. In actuality a shutdown is much more likely to force a small business into liquidation than it is to force a resisting party in the budget dispute to acquiesce.

The biggest problem with a government shutdown is that it turns out to be a thermonuclear attack on an ant colony. The scope and negative impact far outweigh the possible positive outcomes.

Federal appropriations are contained in about a dozen spending bills. Ideally, these bills would be debated and voted on separately. This ideal is rarely achieved. Usually time runs out and these spending bills are rolled into an omnibus bill at the end of the fiscal year and the House, Senate, and President are put in the position of signing the package or shutting down the entire government. In this environment fiscal sanity and conservative policy has a hard time prevailing.

But what if spending bills were required to be voted on separately? What if the dozen bills were required to be broken into small bills. We’d no longer be in the position of having to shut down the entire government over grants made by the National Endowment for the Arts or out of control regulators at the EPA. We could deal with those agencies as discrete and finite issues.

The lesson to be learned from the FAA shutdown is that smaller is better. If the FAA bill had been part of an omnibus appropriation bill we would either have to cave on the contested issues or precipitate a larger shutdown that would be hard to defend. Now the Democrats are in the position of defending billions in subsidies to airports that aren’t needed and making it easier for their union allies to organize workers who don’t really want to be unionized. The House feels so threatened by the Democrat strategy that it went on August recess without funding the agency.

If we win the Senate (assuming we keep the House) following a strategy of voting on lots of small appropriation bills would enable us to not only control the abusive rulemaking power being exercised by federal agencies under this regime but it would actually allow us to zero out federal agencies by simply not appropriating money. If we hit the jackpot and have a Republican president, we could undertake this same strategy to reduce the size and scope of government while forcing the Democrats to defend a lot of indefensible spending.

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