A group of Republican governors warned Congress this weekend that a government shutdown could harm their economies. Some Republican Congressmen have said they will block a bill to continuing funding the government in September, essentially shutting it down, unless the Affordable Care Act is defunded.
Even Republicans who have been staunch opponents of the Affordable Care Act, such as Wisconsin Governor Scott Walker (R), said, “there are other ways to pursue this” than a shutdown. He cautioned that such a move “would affect all 50 of us.”
Governors have a reason to be worried about a potential government shutdown. States would shoulder a big portion of the impact. They would lose federal funds for contractors, which would force them to halt many infrastructure projects such as road, bridge, and sewer repairs. It would also halt grants to local firefighters and money for low-income housing construction. States would lose federal funds that help cover the administrative costs of running unemployment programs, forcing them to advance the money to keep paying benefits.
Meanwhile, national parks and monuments would be forced to close during a shutdown, furloughing Park Service rangers, depriving local businesses of the $32 million they make from tourism to the sites, and draining local tax revenues from that tourism from state coffers.
While the costs of a shutdown depend on how long it lasts and can be hard to calculate, the last time Republicans flirted with this option it was clear that it would have had a devastating impact on the economy at large. It would shave percentage points off of economic growth, increase the deficit, furlough hundreds of thousands of federal employees, hurt the housing market by halting operations at the Federal Housing Administration, block loans to businesses through the Small Business Association, and bring about many other negative impacts.
Yet in the face of these potential consequences, a group of 15 Republican lawmakers in Congress, led by Sen. Mike Lee (R-UT), have signed a pledge not to fund the government unless Obamacare is defunded. The battle will come to a head when Congress will be faced with the need to pass a continuing resolution to keep the government running after September 30.