Veterans of ’95 shutdown assess the current budget battle

WASHINGTON–How does the percolating showdown over federal spending compare to the one in 1995, which resulted in a government shutdown? The fiscal problems are worse, the proposed solutions less sweeping–and the outcome is similarly unpredictable and volatile.

That’s the assessment, at least, from two former Connecticut lawmakers–one Republican and one Democrat–who served during that 1995 clash and who are watching this one from the sidelines.

Ex-Reps. Chris Shays, a Republican who represented Connecticut’s 4th District, and Barbara Kennelly, a Democrat from the 1st, each played a role in that earlier spending battle.

Shays was an ally of John Boehner, now the House Speaker and then a relative newcomer to the GOP’s leadership circle. Shays recalled the excitement among Republicans as they began to seriously tackle entitlement spending.

“We were blessed because we had Ross Perot, who educated the public in a very sustained way, with his charts and all of that stuff,” Shays said of the Texas billionaire, who ran for president in 1992 and helped plant the seeds, in Shays’ view, for a serious discussion about the federal debt.

“There was this real sense that he was on to something and we better pay attention,” Shays said. “There was a real movement, not unlike the Tea Party… he was the precursor to the Tea Party.”

Now, Shays said, there’s not as much public education as there is raw anger. And the Republican proposal at the center of the firestorm-a spending bill for fiscal year 2011 that would cut $61 billion from 2010 funding levels-is not nearly as dramatic, although it’s clearly the prelude to a bigger battle over 2012 spending.

This week, the House and Senate are set to vote on a two-week spending bill, with $4 billion in cuts. That would, for now at least, avert a government shutdown, while lawmakers continue to negotiate a longer-term bill to fund federal programs for the rest of 2011.

Whether the two parties can reach an agreement on the broader measure is still unclear. The Republicans are adamant that their proposed cuts are the minimal level necessary to start down a path of fiscal discipline, while Democrats say they are too deep and unfairly target key presidential priorities.

In 1995, then-House Speaker Newt Gingrich was pushing a plan to trim billions of dollars from Medicare, Medicaid, and welfare, along with other spending cuts to a range of domestic programs, from public health to the environment. It was an aggressive push for a balanced federal budget, something that seems far out of reach today. The deficit for 2011 is projected to be nearly $1.5 trillion.

“I can remember when we thought $200 billion was a big deficit,” said Kennelly. “Now, we’re talking about over $1 trillion, so there has to be change… We can’t keep going like this.”

During the 1995 clash, Kennelly sat on the powerful Ways and Means Committee, where she nurtured an interest in Social Security and other safety-net programs. She now runs the National Committee to Preserve Social Security and Medicare.

“Right now, they’re only talking about [cuts to] 12 percent of the budget–discretionary spending,” Kennelly noted. Cuts to Medicare and other such programs, at the center of the 1995 fight, haven’t even come up yet–although they are certainly part of the backdrop.

Still, Kennelly said, the cuts on the table right now are “pretty deep.” She speculated that even Boehner thinks the proposal is “pretty radical,” but he’s being spurred on by the 87 new Republican freshmen, many of them Tea Party-backed conservatives elected on the promise of a dramatic fiscal realignment.

Shays doesn’t label the current proposal extreme. But he’s not exactly enamored of the GOP’s approach.

“They aren’t getting to the real issues yet,” he said of their decision to duck, for now anyway, cuts to entitlement spending. “And the other thing that’s a little annoying… was the unholy agreement” Republicans made with Obama in December to renew all the Bush-era tax cuts, with no spending cuts to pay for those breaks.

That, he said, has worsened the current fiscal crunch. Fifteen years ago, “we came close to making a significant impact on spending,” Shays said. “We started to light this candle and it got blown out and people became cautious.”

He was among those urging Republicans to stick to their guns. But he said Gingrich, a firebrand and Democratic boogieman, wasn’t the best messenger. He recalled a GOP conference meeting in which Gingrich declared, “Ultimately, Clinton will cave.”

To this day, Shays says wishes the Speaker had not uttered those words. “Someone in that caucus let President Clinton know that,” he said, and then it degenerated into a personality clash. And Gingrich was no match for Clinton on that front.

Both Kennelly and Shays said the shut-down prompted an uproar from their constituents.

“People were somewhat disgusted,” recalled Kennelly. “They said, ‘You’re sent down here to vote and do your job and all of a sudden you can’t agree and so you’re going to shut the government down?’ The average citizen was not happy at all.”

She said federal workers in her district were furloughed and constituent requests, whether for a new Social Security number or veterans’ benefits claims, were not processed. “People might say they don’t like the government, but when something like this happens, they realize how much the government plays a role in their lives.”

Shays said he was surprised and disappointed by the public reaction.

“I took the view that we needed to tough it out,” he said. “We had parents call us outraged and concerned that their children’s student loans wouldn’t come into play. We had others who were concerned that they couldn’t get into the national parks.”

Many of those folks were “ardent Republicans,” he said. “I was really disappointed by that, because I felt like ‘Hello, so you can’t get into a park? The government’s dealing with a colossal issue’,” Shays recalled.

As for how this current confrontation unfolds, Shays said he thought a shutdown was likely, particularly if either side thought the other would shoulder the blame.

“If one side thinks they can blame the other, they’re not going to give,” he said.

Kennelly said she “can’t believe” Congress recessed for a week given the high stakes. But she was more optimistic than Shays about how this budget fight would end.

“I would be most surprised to see them shut down,” she said. “We’ve got enough people out there who think that Congress isn’t doing their job. And if they do this, it just shows they can’t do their job.”

But both she and Shays agreed that this was just the first salvo in a bigger budget battle to come. And the next round will include entitlements, which will raise the stakes considerably.

“There will be plenty of time for those other fights,” said Kennelly. “They’re coming, let me promise you.”