Reed: Government Shutdown Hurts Economy
Thursday, April 07, 2011
A federal government shutdown will go into immediate effect if Congress fails to reach a budget deal by midnight on Friday – a move that U.S. Senator Jack Reed (D-RI) today warned would be “irresponsible, needlessly disruptive, and could hinder economic recovery.”
He added that the shutdown remains “avoidable” if Republicans and Democrats are willing to reach a deal.
“People need to remember that if the government shuts down, the bills will still pile up,” Reed said. “What we need is for the House leadership to accept some reasonable compromise which can pass with bipartisan support.”
Congress has already passed six short-term measures to temporarily keep the federal government open while cutting $10 billion out of this year’s budget. These temporary measures bought Congress almost two months as debate raged on over House Speaker John Boehner’s (R-OH) proposed $32 billion budget cuts for 2011. Before today, there was real optimism that Senate and House leaders could agree to a level of $33 billion in additional cuts – $73 billion when measured against President Obama’s FY 2011 requests – and prevent a repeat of the Newt Gingrich shutdowns of 1995 and 1996.
Past shutdowns cost $1.4 billion
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“The Gingrich-led government shutdowns of 1996 and 1996 lasted 26 days and cost taxpayers over $1.4 billion,” Reed said. “We can’t afford to repeat those mistakes”
Last month, the U.S. Senate voted 56-44 to reject the House-passed spending plan that would have cut $61 billion from education, health, and public safety programs. Republicans failed to generate the 60 votes needed to advance the measure, falling short of even 50 votes in favor. Reed criticized the Republican House leadership for shirking its “shared responsibility to govern.”
“Democrats offered a responsible plan to cut spending, but Republicans are now unwilling to accept a national compromise that meets them more than halfway,” he said. “Once Republicans shut the government down, what will be their solution for reopening it?”
Would hurt the economy
Though a federal shutdown leaves emergency services like police, firefighting, armed forces and utilities in place, it could still have serious repercussions for the national – and Rhode Island – economy.
“Instead of creating jobs, a shutdown could put hundreds of thousands of Americans out of work and likely create real problems for small- and mid-size businesses that do business with the government,” Reed said. He also warned that, in failing to reach a compromise, “we risk some real danger to the job growth we’ve seen over the last few months, and, if that national trend is thwarted, Rhode Island’s chances of better economic news is thwarted too.”
According to the Rhode Island Economic Development Corporation (RIEDC), the federal government is RI’s third-largest employer with 11,581 employees (not including the state’s 3,000 active military personnel and 7,000 reservists). Employees of “non-essential” agencies – those not involved in national security, critical foreign relations, or life/property safety – as well as contractors providing information-technology support and other services to the federal government could be instructed to stay home if a shutdown occurs.
“The American people want their government to work and they want their representatives in Washington to work together,” said Reed. “Forcing the government to shut down sends a terrible signal to the American people and could create undue hardships for families and businesses. That is a risk we can do without during these difficult economic times.”
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