1995 shutdown of the federal government - 17 November 1995

Here's a howdy do! Here's a state of things, US government shuts down. Last Wednesday morning, you could see that headline everywhere on every sort of paper from the trashiest tabloid to what we used to call, the good grey New York Times and in every language from English – still the main language in most parts of the country – to Lithuanian, Yiddish and I suppose Cherokee Indian – the Cherokee Oklahoman is printed in that dialect, "Why was the government shut down?"

By the time some countries, New Zealand instance hears this, the government may well have applied for what is called restructuring, and used to be called bankruptcy under Chapter 11. Really, not really, but that head line alone blankets more half truths and misapprehensions than a politician's campaign speech.

First, well let's begin by saying that the fiscal year began six weeks ago and usually by now, the sitting Congress has passed enough appropriations bills - they're the bills that act on the authority of a previous commitment, and say how much money is going to which departments of the government, enough to have the government pay its way. So, six weeks ago, the Congress had 13 bills pending whose function was to pay for the daily running of the government. Only three of them had been voted on and signed into law, one of them President Clinton vetoed.

The chronic trouble with Appropriations bills is that they don't come nice and clean and simple, there's never a bill that funds say, The Library of Congress, they have usually a main purpose, but at the last minute all sorts of hampering amendments can be added and fat slices of pork: money for a congressman's favourite local project, a new bridge over the Hackensack River, an extra million for an army veterans hospital. And if the core of the bill has one big thumping issue entirely, as now about welfare or the health protection for the aged, then the house chairman of the budget committee or appropriations committee, most of all the house speaker can simply shelve all the other bills: if you won't pass my big bill you're not going to get your little one.

If the suspense is too much for you, maybe it's time to throw in the qualifying line, well only partially shutdown, what they call the 'non essential' services. If you're going abroad and needed a passport you'd have to wait. Or the national parks, monuments and other tourist attractions, the Washington monument, Yosemite the Statue of Liberty was shut up or shutdown. The people doing all the paperwork in every department, except maybe the CIA, busy there in its huge secret building in Virginia, using its radar vision to spot spies or invent them. In all 770,000 federal workers were laid off and to hear them, at least the ones interviewed on television, it's all a bleeding shame.

I suspect that the hundreds of thousands who weren't on television just loved it – it had been established before it happened that nobody was going to lose a penny in wages, they would all be reimbursed when it was over. In fact, three quarters of a million Americans were enjoying a paid holiday. Hence, the air of calm, of almost serene well-being among the Americans who, theoretically, were thrown out penniless in the cold.

Each party blamed the other. Let's see what they meant if anything. We ought to go back anyway, because for those of you hearing this talk over the weekend, what's more likely is that it will all have been settled, but why it came about in the first place is the interesting bit. Why should it ever happen? First of all, this crisis first loomed about two weeks ago when both the Democrats and the Republicans or better let's say the main actors, President Clinton on one side, Senator Dole and House Speaker Gingrich on the other, they were the warriors, they both began with a bee in their bonnet 'B' for budget. Sooner than later, the Congress has to pass a budget bill, both bills – what Mr Clinton wants and what Dole and Gingrich want – are hideously detailed and complicated but not obscure. They differ mainly on two issues which, since the Republicans took over both houses of Congress, have ensnared or snagged or stalled every other piece of legislation. The two issues are: the reform of welfare, and the reform of Medicare – the system that pays the medical expenses of everyone over 65, a pauper, a Perot.

There are a score of other proposed acts of appropriations, or cuts in both budgets, but there's very little debate about some of the grosser items, such as millions and millions in the Republican budget going to subsidise big corporation farmers while the old American single farmer with 100 acres in soya bean or wheat is about to pack it in. Welfare reform, everybody wants it except the 15-year-old unemployed unmarried girl with two children, who wants another and gets by on a government cheque and food stamps. I think it's not too much to say that every government in the Western world finds after 50 or more years of the welfare state that two generations have been born and survived who expect the government not just to guarantee the minimum care and subsistence, but to give them a living. In a nutshell, welfare is everywhere costing more than any government can afford.

This country woke up to this bitter truth as late as anybody. Fifty years of the Democrats running the House of Representatives and the Senate for nine tenths of the time, got Americans used to the idea that every sort of shortage of work, food, healthcare, profits, raw materials, manufactured goods could be made up by or paid for by Washington. The man who 60 years ago convinced the nation that Washington was every American's rich uncle was Franklin D. Roosevelt no question. No president before or since, well say none except Lincoln, as so seized the government, all government at the centre and made everybody's business and everybody's welfare, Washington's business. One of his famous aides summed up the new deal philosophy in a pungent little phrase: tax and spend, spend and tax.

The irony is that in the 1932 presidential election campaign, Roosevelt first, which coincided with the pit of the depression, Roosevelt campaigned in the belief, on the slogan anyway, that what was wrong with American government was too much dependence on Washington on the federal government, give a lot of its powers back to the states as the founders intended. He was mighty eloquent on this theme and the shivering impoverished millions went for it. But the day after Roosevelt got into the White House he took all the reigns of government into his own hands, forgot the role of the states on the advice of the visiting Englishman John Maynard Keynes, he did what only the bankers had been used to doing: borrowing vast amounts of money. So with vast borrowing he vastly spent and set up scores of new government agencies, from the agricultural adjustment administration – the adjustment meant farmers were to be paid handsomely for not growing wheat or rice or corn or whatever – to the C.C.C., The Civilian Conservation Core, where three quarters of a million 15/16-year-olds were taken off the streets and set to, building bridges and planting 10 million trees. Those were vibrant times alright.

We were in fact the willing recipients of a form of national socialism except Roosevelt was a benevolent dictator, but it was believe me wonderful to live through. We never knew then, and few of us would live long enough to know that the bill would have to be paid 50, 60 years down the line. The Republicans feared so all along, and last year convinced a reluctant country it was so, so it all came down to what to cut and the Republican's stubborn answer was and is: welfare and Medicare.

Now the president says if the Republican budget were passed, over a million poor children will be out on the streets and the aged would be left waiting in the hospital emergency rooms. Nonsense. And the Messrs. Dole and Gingrich say if the president's budget as of now were passed, it would never be balanced in seven years, 10 years, perhaps ever. Nonsense. The truth is that nobody is cutting the cost of Medicare. The Republicans propose to increase it in the next year by 6.7 per cent, Mr Clinton by 8.9 per cent. And the more you look at the two budgets – the Clinton preferred and the Senate version already passed – the more they're saying the same thing, with small percentage differences. So why do they, did they, go on being so boringly self righteous? Because neither side dared say 'we surrender'. That would mean either the president or the Dole Gingrich team could crow and declare it a great sign for 1996 when there is, they never forget for an instant a presidential election.

By the way, there never was any question of the disaster both sides threatened us with, that the United States would have to default on interest payments due last week on government securities, there were all sorts of government funds stashed away that could be tapped. And the secretary of the treasury drew out from civil servants retirement funds – they'll go back later by some slight off hand you maybe sure – he drew out wait for it, 61.3 billion dollars and this will take care of interest payments on the debt this week and for several weeks to come.

I said earlier that if you went behind or outside the television cameras and talked to only a few of the three quarter of a million federal workers who are workless at home, but going to get their wages, you'd have noticed an air of happy resignation before this national crisis. Something of the same mood was noticeable among the ordinary folk that you see and do business with everyday. It must be because most of them know and remember that this threat has happened nine times since the middle 1980s and four times the government has been shutdown, well partly, well for a day or two. A real shutdown...not really!

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