The new U.S. House Speaker, Congressman Mike Johnson of Louisiana, is about to experience the first major test of his mettle and abilities. Just a few weeks into this job, Congress is again approaching another fiscal cliff and likely 11th-hour increase of the U.S. debt ceiling, required by November 18th, the Saturday prior to Thanksgiving week, and the second largest travel week of the year.
Let's first hop in the Way-Back machine to 1995, just under 30 years ago, new House Speaker Newt Gingrich (R-GA) is in a fit of pique, after spending 25 hours on Air Force One, relegated to the back of the jet, by President Bill Clinton, both are returning from the state funeral of former Israeli Prime Minister Yitzhak Rabin, who was assassinated on November 5, 1995, two years after shaking hands with P.L.O. Leader Yasser Arafat on the White House South Lawn, following the signing of the Oslo Peace Accords. In addition to being denied access to Clinton on the return flight, the Speaker had been seated with traveling press and more junior staff and was asked to exit the jet from its rear ramp. Gingrich confessed his displeasure soon after at a press breakfast sponsored by The Christian Science Monitor.
Speaker Gingrich sent a stopgap spending bill to the White House which he knew that President Clinton would not sign, as the legislation also raised Medicare insurance premiums and cut back environmental regulations. Clinton's veto of the funding bill caused a government shutdown and the furlough of all non-essential federal government employees from December 16, 1995 to January 6, 1996.
That would be the longest sustained closure of the federal government in history until President Donald Trump bested that record during the second of the shutdowns he led during 2018-2019, lasting 35 days, furloughing 380,000 non-essential personnel, and costing the federal government roughly $5-billion.
Interestingly, Trump was seeking $5 billion in funding for his southern border wall in December 2018 and when the GOP took the House Majority control in January 2019, Trump held his line in the sand, and the shutdown occurred.
There is always an element of Kabuki Theater involved in these shutdowns as well as the negotiations that follow. A small handful of 8 GOP members of Congress upset with their own Speaker Kevin McCarthy and his handling of the prior budget ceiling negotiations, joined with all House Democrats and ousted him. Circumstances in Washington, Congress, and on Capitol Hill have not changed much since then.
While serving as Speaker, Gingrich did lead and deliver TWO balanced budgets, pass all 13 provisions of the Contract with America (on the House side, only two cleared the Senate and were signed into law), and at least for a few years, Gingrich did away with 'earmarks,' the long practice of tucking billions of spending into unrelated bills for funding local, regional, and state projects across the country. At this point long restored, we should more realistically call them Cauliflower Ear Marks.
To reach a federal deficit of ONE TRILLION dollars it took all federal government spending from George Washington through Jimmy Carter and arrived early in the first administration of Ronald Reagan. All U.S. defense spending during World War II (1941-1945) came to nearly $ 4 trillion, and U.S. federal government spending then surged to nearly 40 percent of GDP. Our National Debt now stands at $33.7 trillion and is completely unsustainable. Interest payments on that debt now exceed our national defense budget and are ONLY surpassed by the line items for Medicaid and Social Security spending. Some suggest that we simply not pay that interest or repay this loan to ourselves...
Though our Federal Reserve can just print money, we SELL savings bonds, treasury bills, and the like, which are guaranteed by the full faith and credit of the United States of America. Those bonds and T-bills are embedded in almost every retirement plan, public and private, and a portion of the savings/investment strategies of almost every corporation of any size. Two of our largest creditors are also China and Saudi Arabia, one of whom covets the day that the U.S. Dollar is no longer the world's reserve currency, and the other of which depends largely on its economic partnership with a U.S.-led Western world, to supply an unending global oil supply.
Default on those savings bonds and T-bills and watch just how fast the wheels start coming off various critical elements of our economy. I hope Speaker Johnson is a student of history and a good listener, and that Majority Leader Steve Scalise (R-LA) is already preparing that briefing book
