Matthew Continetti documents what he describes as the real problem with the federal government shutdown.
Fellow deficit hawks, I bring bad news. Republicans and Democrats are dug in for the first government shutdown for the first time in six years. What they’re fighting over should trouble you if you’re worried about entitlements and out-of-control spending.
The Democrats want to preserve healthcare subsidies projected to cost $350 billion over 10 years. But if Congress can’t summon the will to allow these “emergency” supports to expire, how will it solve the much larger problem of our deficit and debt?
To recap: In 2010 the Patient Protection and Affordable Care Act, a.k.a. Obamacare, set up a healthcare marketplace called the exchange where self-employed individuals and other people without employer-provided health insurance can purchase coverage. …
… These emergency subsidies were supposed to be temporary. The original legislation ended them in two years. But in 2022, as part of the absurdly named Inflation Reduction Act. Democrats extended them until 2025. Now they’re set to go on December 31.
Senate Minority Leader Chuck Schumer is adamant that Senate Democrats won’t vote to keep the government open until Republicans agree to extend the subsidies. John Thune, the Senate majority leader, says Republicans are happy to talk about the subsidies in a separate bill—so long as Democrats turn the federal lights back on.
Hence the panic. Democrats want to keep the money flowing, gradually expanding eligibility and subsidies to cover as many Americans as possible. Health insurers don’t want to see the extra government backing they’ve enjoyed disappear. And some Republicans fear a backlash from voters who could find themselves paying more for health insurance on the exchange.
Conservatives, meanwhile, fret that Republicans will follow Democrats on an off-ramp that would keep the spending intact—and add up to $350 billion in debt over a decade. The shutdown could wind up as a case study in the insidious entitlement ratchet effect: Each additional benefit creates a constituency that demands its perpetuation. The ratchet makes government growth look unstoppable—along with the accompanying debt and stagnation.
