Washington is on the verge of defaulting; should Utahns worry?

Four major legislative initiatives are in play, each of them potentially having dramatic consequences for the economy and even society. This is one time when it’s difficult to be overly dramatic

By Frank Pignanelli & LaVarr Webb

Washington was in major turmoil this week — even more than usual. Four major legislative initiatives were being promoted or opposed, each of them potentially having dramatic consequences for the economy and even society. This is one time when it’s difficult to be overly dramatic. We explore the impact on our local lives and politics.

Congress was focused this week on authorizing spending beyond October at the risk of the federal government shutting down. Also, the debt ceiling must soon be raised to accommodate out-of-control deficit spending. What does passage or failure mean for Utah’s congressional delegation and the political scene?

Pignanelli: “These negotiations are extremely complicated. It’s a Rubik’s cube. It’s a Venn diagram. And it’s every sort of, like, crazy mathematical thing that they’re trying to fit together.” — Leigh Ann Caldwell, NBC News

Small children often erupt in temper tantrums that are soon resolved by adult supervision. When adults have similar eruptions without guardians, the results can be disastrous.

Closure of the federal government always impacts Utah’s economy, especially through tourism, federal employees, entitlement programs, etc. Failure to raise the debt ceiling would have reverberations on credit, trade and other economic activities. Because Democrats control both houses, they will immediately be pasted with blame. However, should the stoppage last beyond a few days then all members of Congress, including Republicans, will be blemished.

Paying bills and obligations is a fundamental activity for all families. Thus, any pain suffered because of congressional stubbornness will be a topic in primary and general election battles. Frustrations with the 2013 government shutdown raised issues for federal candidates in 2014 and 2016.

Everyone watching just wants the screaming child to behave and be quiet. Similarly, Utahns don’t care about partisan bickering, they just want their officials to perform basic duties.

Webb: Republicans, including Utah’s delegation, are mostly united in opposition to raising the debt ceiling and authorizing additional spending. Since Democrats control Congress, Republicans are saying they must pass these bills on their own. Republicans don’t want to enable historic spending blowouts that dramatically expand the welfare state. And Democrats have not been willing to compromise or make concessions to Republicans.

However, Republicans open themselves to charges of hypocrisy by refusing to help on this must-do legislation. During the Trump years, Republicans routinely voted to raise the debt ceiling and pass continuing resolutions to fund the government.

One way or another, this legislation will pass. And if the government shuts down for a short period, it won’t really shut down. Essential services and payments will continue, some federal employees will get paid vacations, and the shutdown will not impact very many people.

But both sides will blame the other and attempt to exploit it for political purposes. Utah’s Republican delegation won’t suffer any real damage. However, Republican obstruction on this and other legislation could push Democrats to eliminate the filibuster process, allowing a simple majority to do anything they wish.

The $1.2 trillion bipartisan Infrastructure Investment and Jobs Act and the $3.5 trillion “Build Back Better” appropriations bill are the focus of intense wrangling — and that’s just inside Democratic caucuses. What does passage or defeat mean for Utah?

Pignanelli: Obtaining a loan to fund a home, car or other major asset is a logical and beneficial action by families. Therefore, the infrastructure legislation has broad bipartisan support. Government investment in transportation, water, broadband and other capital projects will benefit Utah. Because our state is so well managed, these federal funds will be efficiently spent.

While several of the separate parts of the larger package do have support, the overall price tag is creating serious consternation, even among the center-left. Labeled Joe Biden’s bill, the president is facing difficulty building necessary momentum across the country. Because the American and Utah economies are rebounding, his sales pitches are not resounding. Utah’s congressional delegation will not support, and will face few recriminations.

Webb: The $3.5 trillion reconciliation bill would create a historic surge in social welfare spending. It fulfills every social spending fantasy for left-wing Democrats. The real cost will be much more than $3.5 trillion, and it’s certainly not paid for, as President Biden and Democrats claim. It will create vast new entitlement programs, just when existing entitlement programs like Medicare and Social Security are running out of money and need to be shored up.

I’m not as opposed to the bipartisan infrastructure bill because the funds will be used (mostly) for real infrastructure, which the country needs. Utah Sen. Mitt Romney has been a major champion of the legislation and he claims it is paid for, although that is questionable. Sen. Mike Lee is opposed.

Does Utah need another massive infusion of federal dollars?

Pignanelli: Although Legislators are still laboring to spend the billions from COVID-19 relief, federal dollars can assist in water collection and distribution, broadband and transportation to maintain our current excellent trajectory.

Webb: Utah will use infrastructure money carefully and wisely. Still, it’s sort of an embarrassment of riches. Utah has done a good job paying for infrastructure with state dollars, so the federal largesse is a big bonus. If turning down the federal dollars would reduce the spending and debt, I’d say refuse it. But the money would just be diverted to some other state or local government where it probably wouldn’t be used as smartly. So it makes no sense to unilaterally return the money.