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Congress could deal a blow to the economy

U.S. Senate Majority Leader Sen. Harry Reid (D-NV) (R) speaks as Sen. Charles Schumer (D-NY) (L), and Senate Majority Whip Sen. Richard Durbin (D-IL) listen during a news conference Sept. 22, 2011 on Capitol Hill in Washington, D.C. The Senate Democratic leaders discussed the Disaster Relief Funding at the news conference.

Bob Moon: We've said it before, and we'll probably end up saying it again: If Congress can't agree on a bill to fund operations through mid-November, the government could shut down next week.

It continues to look like we're approaching that precipice for the third time in a year. This time, the bickering is over roughly $7 billion for the Federal Emergency Management Agency, covering relief costs from Hurricane Irene and other disasters. The House wants $7 billion worth of corresponding cuts. Today, the Senate said no way.

Compared to the trillions overall to keep the government going, this is pocket change. But as Marketplace's David Gura reports, the implications are much bigger.


David Gura: Ross Baker can hardly believe Congress is fighting over disaster relief. He used to be a staffer on Capitol Hill. Now, he's a political science professor at Rutgers.

Ross Baker: This is the kind of issue that 20 years ago would not have led to a possible government shutdown.

That's because in the grand scheme of things, this probably isn't a fight worth having.

Stan Collender: The absolute amount of money we're talking about is insignificant -- a virtual rounding error.

That's Stan Collender. He's a budget expert with Qorvis. The federal budget for 2010 was almost $3.5 trillion. Collender says this isn't about the money -- it's about House Republicans standing on principle: they vowed to make cuts to cover any spending. With our economy in such bad shape, he says that's a risky position.

Collender: Look, there's nothing good about a shutdown.

Collender says we may see this kind of brinksmanship again and again.

Don Marron used to head the non-partisan Congressional Budget Office. He says the business of governance has changed.

Don Marron: Deadlines and precipices are what drive action.

Politicians don't focus on long-term solutions. And that worries another former CBO director, Alice Rivlin.

Alice Rivlin: If we can't get even a small thing done, we send a message to the public, to business, to the markets, that we haven't got a competent government in charge that can even solve small problems.

But we've got one that seems to be getting better and better at creating them.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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A century ago, if the government shut down for a week, the country would hardly notice. If a government shutdown would truly be a disaster for the economy, then the real problem is not that Congress hasn't passed the laws necessary for it to resume, but that government and the economy are so connected. "Government is not the solution to our problems; government *is* our problem."

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