Opinion

When shutdown politics add to economic woes, nobody wins

Both sides would be better off coming to the table and finishing the job

Federal workers and contractors, along with their unions, demonstrate against the partial government shutdown in the Hart Building on Jan. 23. The recent shutdown was just another blow to the nation’s economic psyche, already reeling from December’s stock market downturn, Winston writes. (Bill Clark/CQ Roll Call)

OPINION — The Congressional Budget Office told us this week that the U.S. economy is likely to take a $3 billion hit from the partial government shutdown, assuming federal employees will get their back pay. $3 billion is a significant amount, but it is likely to have a relatively small impact in the context of a nearly $20 trillion economy. What the estimate doesn’t measure, of course, are specific personal impacts on people, families and small businesses.

The shutdown was just one more blow, if a minor one, to the nation’s economic psyche, which took a beating in December when the stock market took a downturn. Many Americans lost a significant portion of their savings, especially retirement savings. Put the two events together and we’re now beginning to see some erosion in people’s confidence in the economy, despite good growth and unemployment numbers overall.

A series of three Winning the Issues surveys done at the end of November and December, and on Jan. 15, showed a sequence of changes in voter attitudes, first affected by the stock market decline first and then by the shutdown.

The most macro barometer — the right track/wrong track question on the direction of the economy — shows a decline in people saying the economy is on the right track, going from 48-34 percent to 45-35 percent to 43-41 percent in our last survey. Voters went from being positive by 14 points in November, to 10 in December, to only 2 points in mid-January. Not the kind of trend anyone wants to see.

Also watch: Trump warns of another shutdown if Congress doesn't reach a new deal by Feb. 15

Blame to go around

The continued focus of political leaders on the shutdown and immigration at the start of the year, along with the stock market’s continued instability, only helped increase voters’ uncertainty about the economy.

When voters were asked to choose which party could better handle the economy, we saw Republicans hold steady at +4 (45-41 percent) in the November and December surveys, but then lose their edge this month with voters dead even (43-43 percent) as the shutdown continued.

Republicans also lost support on the jobs issue. At the end of November, voters picked them to better handle jobs by 8 points (47-39 percent). By the end of December, their lead had slipped to 3 points (45-42 percent) and in mid-January, it dropped to 44-42 percent, slightly lower but also within the margin of error.

While these changes ought to concern congressional Republicans, President Donald Trump’s economic job approval actually took the bigger hit. In November, a plurality approved of the way he was managing the economy (47-42 percent). A month later, his numbers flipped, coming in at 42-47 percent, a 10-point shift that likely reflects the effect of the stock market decline. By Jan. 15, he was at 41-49 percent, down another 3 points. The president said publicly he was willing to take the “mantle” for the shutdown, and it looks like voters took him at his word, costing him politically.

Still, the last few weeks haven’t been roses for the Democrats either. A recent Washington Post/ABC News poll, done before the shutdown ended, found voters taking both Trump and Speaker Nancy Pelosi to task for the way they were handling the funding impasse. 

Thirty-four percent approved of Trump’s efforts, compared to 60 percent who disapproved. Pelosi’s approval/disapproval was at 36-54 percent. The Winning the Issues data also showed that, when it came to handling the economy and jobs, Democrats have made some slight gains against Republicans over the last couple of months. But despite the stock market and the incessantly negative coverage of Trump throughout the shutdown, they have been unable to gain an advantage on the economy and still trail Republicans on jobs.

Stopping ‘stupidity’

That political fact of life should matter going forward and perhaps spur efforts to stop shutdowns from happening in the future. Ohio GOP Sen. Rob Portman has introduced the End Government Shutdowns Act, which he says would “prevent the federal government from shutting down, ensuring that essential government services aren’t disrupted and protecting taxpayers who must bear the resulting cost.” This makes the fifth time Portman has offered the legislation which would automatically put in place a continuing resolution if budget negotiations fail during the appropriates process.

Virginia Democratic Sen. Mark Warner has introduced a similar anti-shutdown bill, the Shutdowns Transferring Unnecessary Pain and Inflicting Damage In The Coming Years Act — (bad name, good idea) — affectionately being called the “Stop Stupidity Act.”

Several Hill leaders from both parties have expressed interest in the idea, though not everyone is on board. There is some opposition from both sides, though how much remains to be seen, and the White House hasn’t weighed in either. Still, Portman says he hopes to see his bill included when the partial shutdown funding issue is resolved.

So, as the negotiations over border security begin on Capitol Hill, what should both sides have learned over the past month? There are few winners and many political risks in the game of shutdown politics. Both sides would be better off coming to the table and finishing the job.

David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, and is an election analyst for CBS News.

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