Just when you thought American politics couldn’t get more dramatic, Donald Trump is apparently itching to hit the shutdown button on the federal government. Again. Beyond another episode of political theater, the shutdown would also affect the fundamental functioning of our government and economy.
If you’re wondering whether Trump would really shut down the government, history provides a pretty clear answer. During his presidency, Trump orchestrated three government shutdowns, including the longest in U.S. history – Trump’s approval ratings took a significant hit.
The United States recently dodged a shutdown when Congress ed a bipartisan spending bill funding the government through March 14. During this process, Trump and his allies attempted to derail the initial agreement by making demands about the debt ceiling – a critical piece of legislation determining how much money the government can borrow to meet its obligations. Luckily, the bill was approved overwhelmingly in the House (366-34) and Senate (85-11), proving even Republicans are getting tired of Trump’s antics. The bill also doesn’t make the debt ceiling changes Trump requested.
How can Donald Trump use the threat of a shutdown to get the debt ceiling suspension he wants?
Many people don’t realize that the debt ceiling is not about new spending. It’s about paying for things Congress has already approved, including Social Security, Medicare, military salaries, interest on the national debt, and tax refunds. Currently standing at around $36 trillion, the debt ceiling is suspended until January 1, 2025, and that timing is crucial to understanding Trump’s current strategy.
When the government hits the debt ceiling, the Treasury Department can’t issue new securities to borrow money. Instead, it must implement “extraordinary measures” to avoid default, including pausing investments in retirement and health benefit programs. If these measures are exhausted and the ceiling isn’t raised, the government would face an unprecedented default, potentially triggering a catastrophic financial crisis.
Trump’s current strategy reveals his thinking about future shutdowns. He’s demanding that Congress either eliminate or extend the debt ceiling to 2029 before he potentially takes office to avoid a shutdown. This would give him maximum flexibility for his proposed agenda of tax cuts and increased military spending without dealing with pesky debt limits.
The debt ceiling wasn’t always a political weapon. Established in 1917 through the Second Liberty Bond Act, it was initially set at $11.5 billion and was meant to streamline government borrowing. Now, despite the potentially catastrophic consequences of a default, it’s regularly used as leverage in policy negotiations.
This transformation of routine fiscal management into high-stakes political brinksmanship is precisely why the current situation is so concerning. Trump has previously suggested to allies that the government should default on its debts rather than compromise, a position that economic experts universally agree would be catastrophic for both the U.S. and global economies.
The next crucial deadline is March 14, 2025, when the current funding expires. Since Trump will be president by then, we could be looking at another significant budget showdown early in his term. While 170 House Republicans recently defied his warnings and voted for the spending bill without his demanded debt ceiling provision, showing there are limits to his influence, his track record suggests he’s willing to push those limits to their breaking point.
The real question is whether Congress and the American people will continue to allow government shutdowns and debt ceiling crises to be used as political leverage, even when the stakes for ordinary Americans are so devastatingly high. After all, each week of shutdown costs the U.S. economy approximately $6 billion, disrupts essential services, and forces hundreds of thousands of federal workers to either stay home or work without pay.
Published: Dec 22, 2024 09:36 am