Shutdown: ObamaCare (No) and the Federal Government (No)

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The House of Representatives is making a symbolic attempt to shut down ObamaCare. The members know that they cannot get this through the Senate. Obama would veto it even if they could.

Why are they doing this? Because they can. They can let the voters back home know that they are taking a stand. They identify themselves as anti-ObamaCare. They can run on this platform in November of 2014.

Once the bill is rejected, they will have to calculate how long they can continue to refuse to vote for the debt ceiling. Will they last beyond the time when the Treasury Department can no longer cook the books by playing games with federal retirement funds?

Will they eventually capitulate? Yes. Again, they are making a symbolic gesture: “We don’t like the deficit.” Do they hate it so much that they are willing to shut down or make $700+ billion a year in spending cuts? No. They will catch too much opposition from voters who are on the dole.

The public does not care about the deficit. They care about free goodies, and they care about taxes. They have not allowed the federal government to collect as much as 21% of GDP — not even in 1944, during World War II.

The deficit is perceived as make-believe: free money. The voters have shown that they do not care. But they want their free goodies, and they will not tolerate federal taxes.

The House Republicans are taking a stand where voters are unwilling to let them take a stand at voters’ expense. “We want goodies! We want goodies!” If the Federal Reserve has to create money to buy over half the deficit, who cares? Not voters, who have never heard of the Federal Reserve. Not academic economists, who are employed by it or hope to be. The FED employs 20,000 people, using free money to pay them.

So, how long will House Republicans continue to take a stand? Until the polls indicate that they will lose in November 2014.

On October 1, enrollment in the exchanges is to begin. But hardly anyone knows how to enroll yet. The computer programs are not ready. The confusion has not yet hit. The sense of betrayal has not yet hit Obama’s poll numbers.

If Republicans can hold out long enough for resentment against the program to spread, they win politically. They can hold out longer. But at some point, they will capitulate. That’s what the uncertainty is all about. It’s about the timing of their capitulation. If they wait too long, we could get a Democrat-controlled House in 2015. Pelosi would be back in power. The Pelosi-Reid-Obama team would run the country for two years. What might come out of that?

In November, both parties want to run on this slogan: “We told you so.” The Democrats want to run on “We told you so about Republicans’ hostility to the middle class.” Republicans want to run on “We told you so about how bad ObamaCare is.”

That’s what the House’s fight is really all about. They can make their point before the government really does start cutting spending enough to create backlash in November. Then they will decide that enough is enough. They will vote for another continuing resolution.

The fight will be over how long the continuing resolution is for. From the Republicans’ viewpoint, the shorter, the better. They will then get to complain about ObamaCare every few months. The Democrats want a long extension. That will be what the fight will boil down to. But the House Republicans will capitulate.

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