It is several days too late to avoid lasting consequences to the United States’ financial reputation. Higher interest rates over the next several years will affect not just the federal budget, but also budgets of government units across the country. Individuals and businesses will be paying higher interest rates too. Yes, all this is happening just because the federal government is in bankruptcy.
The Treasury thinks it probably has enough cash left to get through the next nine days before everything comes to a crashing halt, but such things can’t really be predicted with that kind of precision. The time to start the government shutdown is now.
No matter which way I look at the cash flow numbers, it looks like it will be necessary to shut down essentially everything we think of as the federal government to keep it whole financially. It won’t be like a snow day or budget impasse when the government continues to operate without its “nonessential personnel.” If there is no money left, it is also hard to justify keeping most of the “essential” government employees on the job. But on the other hand, agencies whose work is entirely paid for by user fees will remain open as long as the money keeps coming in. Yet the money to pay the White House or Congressional staff, to operate the federal courts, or to pay for health care and retirement benefits won’t be there — nine days from now. So why are the National Transportation Safety Board, the National Park System, and the Food and Drug Administration still operating today?
Of course, more likely than not there is already a committee secretly at work on this at the White House. And if there are political reasons not to announce anything at all until it is patently too late to avoid it, I won’t second-guess that strategy. But politics aside, Monday is the day to warn national park visitors that the parks will be closing Wednesday at noon; to tell the airlines that they are now on their own when it comes to aircraft safety; to cancel inspections at food factories; to start locking down most of the military bases. Because it will be a bit of a help to have those details already worked out a week from now when the real shutdown begins.
