Government Shutdown Comes Down To Trust, Says Policy Expert

The federal government entered its seventh day of shutdown Tuesday. That means thousands of federal workers in West Virginia have now gone a week without pay – and there’s no end in sight.

Maria Young spoke with Sam Workman, director of WVU’s Institute for Policy Research, about what’s behind the standoff – and what it might take to end it.

This interview has been edited for brevity and clarity.

Young: I’m imagining you were not surprised to find out that overnight, the government shutdown did, in fact, go into effect. What do you think led to this point?

Workman: Well, if we sort of take statements from the two parties and the main players involved, I mean, it would seem to be that the debate has really catalyzed around health care funding of various sorts, but specifically subsidies for Obamacare premiums. 

The federal government currently grants subsidies to folks that would buy premiums on the Obamacare exchanges, which of course, lowers the cost for a lot of people, and especially people who are probably working folks but don’t make enough to sort of get health care out on the open market. And so those are set to expire at the end of this year. 

The Democrats want those extended so that those folks can maintain coverage. 

Republicans, for their part, are looking for cost saving measures. They came to power in November last year, partly on the notion that they were going to really trim government. It’s hard to do that without cutting some things. 

What I think at least has some probability of happening is we see a continuing resolution with a commitment from the administration to bargain with Democrats over those health care subsidies. 

If the Democrats do not receive that, I expect the government to remain shut. If they do receive it, it’s very possible you’ll see a continuing resolution that funds the government for at least a few months here, so that they can come back and debate these, these healthcare subsidies, the premium subsidies.

Young: At this point, I think it’s fair to say that both sides are pretty entrenched in their own views on this, and not necessarily willing to bargain a whole lot. Is that a fair way to look at this?

Workman: President Trump is trying and is, frankly, doing an effective job at reshaping the powers of the president around the Congress’s power of the purse. In order to engage in any sort of bargaining, you have to be able to make credible commitments. That’s what a game theorist in my field would say. 

And I think the real hang up here is that if Democrats vote for a full on budget, will the administration come back and bargain over those health care aspects of the bill? And I think, right now, they don’t think he will. And so it’s sort of a credible commitment problem there. 

Young: I mean, it’s a trust issue. 

Workman: Yeah, it’s a trust issue that right now, they don’t trust him to come back to the table and bargain over those health care issues. 

For the administration’s purposes, they really believe in the president’s power to redirect monies authorized and appropriated in the legislative branch and that’s true on every front, really. And so that sort of change in the way we view the presidency is what’s leading to this lack of credible commitment, or, as you aptly put it, trust in the President’s willingness to actually, not just bargain over the subsidies, but actually spend the money the way Congress directs.

Young: Is there a political cost to each side – not talking about President Trump, but talking about Democrats and Republicans in Congress – is there a political cost to allowing this to continue? 

Workman: Yeah, well, there’s a political cost now, and there’s a political cost later to this for both parties, and it will hit differently, right?

The out party tends to receive the bad headlines, at least historically, over this. The political costs, right now, may be high for Democrats. Certainly Republicans are feeling the pinch of having the government shut down, but later on, also, there’ll be costs. If the premiums are cut, then of course people will be assigning blame to one party or another. It’ll depend on the framing of the issue and the broader debate. 

If folks lose their subsidies for healthcare, it’s going to be very, very, a very visible policy penalty for those folks. If the subsidies don’t change, well, it’s hard to know who gets blamed for all this, because citizens at a later date aren’t going to feel the pinch the way they would if they were cut. So there’s both immediate and long term costs to this.

Young: What are the ways that the federal government shutdown impacts everyday people in West Virginia?

Workman: Well, certainly we have a lot of federal employment, especially in the northern part of the state, where we have our research labs, as well as things like the FBI and whatnot, in places like Fairmont. So definitely, the shutdown matters for people, personally and for local economies. 

When people are afraid to spend money, right, we’re not generating local revenues and things like that. 

On the healthcare side of things, a large portion of the state relies on Medicaid and that’s for folks who are really at the bottom of the economic ladder at the moment. But also, you have lots of folks here who are what we would consider lower income, working class individuals for whom the only way they have health care is the Obamacare exchanges with those subsidies enabling them to purchase on the exchange. 

So it will definitely have impact here in the state. It will definitely make people redirect their own household resources in different ways. It will definitely impact local spending and all of that sort of stuff as well.