♪ This program is brought to you by the members of WCNY.

Thank you.

♪ ♪ KATKO: Welcome, America, to "Balancing Act", the show that aims to tame the political circus of two-party politics.

I'm John Katko.

This week, government shutdowns.

In the center ring, we're joined by University of Michigan Professor Donald Moynihan to learn why they occur.

On the trapeze, we'll hear from Mike Christine from the National Air Traffic Controllers Association and New York Representative Mike Lawler about the cost of a government shutdown and if they're ever worth paying.

I'll give you my take, and we'll catch up with Bloomberg's Catherine Luce for what's happening next week INWashington.

But first, let's walk the tightrope.

♪ Once again, the country finds itself in a federal government shutdown showdown.

But what actually causes the government to shut down?

And why does it keep happening?

Under the Constitution, Congress holds the power of the purse.

Every year, lawmakers aim to pass twelve spending bills by September 30th.

If they can't do that, the next option is to pass a continuing resolution, which keeps the government open until a budget is passed.

To keep the government running, the House and Senate must both pass identical spending bills, and the president must sign off on it.

If they fail to do so, the government runs out of money.

At that point, the Anti-Deficiency Act kicks in, forcing all federal agencies except essential operations to close.

Essential workers, such as the military and air traffic controllers, continue to work without pay.

So who's to blame?

It takes both parties cfailing to ompromise.

Oftentimes, shutdowns aren't about budgets; they're about leverage.

Both sides use the threat of a shutdown to score political points or force concessions they couldn't gain in normal negotiations, with the mindset being that if the government closes, voters will blame them, not us.

It's a high-stakes political gambit, and everyone in Washington knows it.

Meanwhile, it comes at a major cost, and the price is paid by furloughed federal workers, families missing paychecks, services grinding to a halt, and a lot of money being wasted.

From national parks and passport offices to food inspectors and small business loans, much is disrupted during a shutdown.

During the 2018-2019 shutdown, for example, about 800,000 federal employees went without pay, and the Congressional Budget Office estimated the economy lost roughly $11 billion in 35 days, $3 billion of which it never recovered.

Furloughed employees eventually get compensated for the time worked during the shutdown, but there's one government group who never goes without a paycheck: You guessed it: Congress.

Their salaries are protected by the Constitution and a permanent appropriation.

One thing is for certain: The government is shut down, but politics is always open for business.

So let's discuss that business in the center ring.

♪ Joining us is Professor of Public Policy at the University of Michigan, Donald Moynihan.

Welcome, Donald, and thanks so much for being here.

So let's get right at it.

When did government shutdowns become a tool for lawmakers?

MOYNIHAN: Well, we don't see government shutdowns until Jimmy Carter's attorney general interpreted the law to say that if Congress does not pass appropriations bills, then we have to stop providing services.

So really, until about 1980, there was no government shutdown, even though every so often Congress would not pass its appropriations bills on time.

KATKO: So if I get that straight, then there wasn't a change in the law.

There was just a change in the interpretation of existing law.

MOYNIHAN: That's exactly right.

It was an attorney general saying, "I think it's illegal for us to continue to provide services and continue to pay employees while we don't have appropriations money in place, it violates the Anti-Deficiency Act.

KATKO: And the law has not changed since either?

MOYNIHAN: Right, it has not.

There have been some changes.

The most important one was in 2019, when a law was passed that guaranteed federal employees would get back pay when the shutdown was completed, but no meaningful laws have been passed to prevent shutdowns from happening.

KATKO: Now, let's talk about the political intent.

Have shutdowns become more political over time since 1980?

MOYNIHAN: I think they have.

I think a couple of things have happened one is that, shutdowns have become more frequent and also gone on for longer.

So the 2019 shutdown went to 35 days.

I think that's possible because, political leaders think shutdowns are a form of political action -- a way to communicate their values or draw a line in the sand when trying to win some sort of political victory.

So it is not seen as a negative outcome to be avoided at all points.

In some points, it is seen as a tool in the toolbox to win political points.

KATKO: Has there been any empirical evidence that shows that people get what they want when they're forcing shutdowns?

Do they gain anything measurable?

MOYNIHAN: I think mostly not.

I mean, there are some counter examples here.

I think the famous one is, Bill Clinton and Newt Gingrich, their government shutdowns ultimately seemed to strengthen Clinton and not Gingrich.

But in general, shutdowns are political blame games and when both parties can cast blame, both parties come off looking a little bit worse for wear.

So both parties might go into a shutdown thinking oh, this is going to help me.

But once they see days and weeks of negative press, they start maybe to have second thoughts.

KATKO: Do you have any other examples of shutdowns that didn't go according to plan for the politicians?

MOYNIHAN: I think the 2019-2020 shutdown which happened in Trump's first term is probably an example there, where Trump basically is not someone who is deeply supportive of many government programs, pushed the shutdown, said I will take all of the responsibility for it.

Then, once the shutdown started and there were difficulties with FAA staff and airport delays, Trump second-guessed himself and became more interested in coming to a conclusion than he was at the beginning of the fight.

KATKO: So let's talk about some of the negative consequences from the fallout of shutdowns.

It's pretty apparent that when the government shuts down, money stops flowing, and people aren't getting their paychecks.

But what are some of the financial damages to the federal budget that occurs when there is a shutdown?

MOYNIHAN: There are a couple of categories of problems that shutdowns create.

One is economic.

The government is one of the big spenders in the economy.

The previous shutdown probably withdrew about $18 billion from economic spending.

Eventually, much of that goes back into the economy if paychecks are reimbursed, but some of it doesn't.

There are economic activities that simply will not occur because of that.

KATKO: Could you give us some examples of that, any concrete numbers, because I'm thinking the Defense Department is one of them, for example.

They have contracts delayed and that costs the government a lot of money, I presume, when contracts are delayed and even if they are reignited after the government comes back online.

MOYNIHAN: There are some that economic activities that will not be reimbursed if the shutdown occurs In general, federal employees will get paychecks for time that they've missed, but contractors have no such guarantee.

So this can range from the person working in the cafeteria or a janitor or Lockheed Martin or a defense contractor who relying on some sort of project for its completion.

KATKO: Has Congress ever seriously considered eliminating shutdowns from a legislative standpoint?

And if so, what would that look like in your mind?

MOYNIHAN: There are a couple of routes here.

Congress could pass a law that changes how they budgeted.

They could effectively create default continuing resolutions.

That would probably mean changing the Anti-Deficiency Act.

Another route could involve a new attorney general who says that previous interpretations of the Anti-Deficiency Act are incorrect, and I don't think we have to shut down the services because of this law.

That would likely be tested in the Supreme Court.

However, there isn't a lot of appetite to push for eliminating shutdowns entirely.

The question of who would have standing to argue for continuing shutdowns in the case of such an opinion is an open question.

KATKO: So let's make clear for the viewers: what does a continuing resolution mean for the budget?

MOYNIHAN: A continuing resolution basically means we keep the funding levels from the Previous year.

So last year's budget basically continues on autopilot, until a new budget is passed.

KATKO: So moving forward, one way is to tweak the Anti-Deficiency Act, Are there any other ways we could legislate to prevent government shutdowns?

A constitutional amendment I plume but any other legislation?

MOYNIHAN: Not that I'm aware of.

I do think it's worth noting that the U.S.

is quite unusual in having these shutdowns.

Most other rich countries do not stop providing public services just because the politicians cannot agree on the budget.

In lot of parliamentary countries, if the major political parties cannot pass a budget, it triggers a new general election.

In those cases, the politicians are at risk of losing their jobs, not federal employees at risk of losing their paychecks.

KATKO: So you're an expert.

What would you say to the American people about government shutdowns?

Are they ever worthwhile?

And if not, how do we make sure we prevent them going forward?

MOYNIHAN: Shutdowns are bad.

There's really no upside to shutdowns.

Think about any organization you're familiar with - if people are forced to stop work in the middle of their workday, told they cannot answer their emails, and drop everything they're doing, that is not going to make the organization more efficient.

We have a fair bit of evidence that shutdowns reduce employee morale at the federal government level, cause more people to quit, and disrupt routine activities, some of which never get completed.

They're just bad from an organizational perspective.

KATKO: What about the impact on efficiencies within the government?

MOYNIHAN: Shutdowns are highly inefficient.

if you talk to federal employees who lived through shutdown, what they'll tell you is it takes often months to recover from the past shutdown to get back to being on top of their work and being able to think about planning for the future.

Mitch of the time they are recovering from the damage of the last shutdown.

KATKO: Professor Donald Moynihan from Michigan, thanks so much.

We appreciate your input.

Now let's head to the trapeze.

♪ ♪ KATKO: On the trapeze this week, we have the Eastern Regional Vice President from the National Air Traffic Controllers Association, Mike Christine, and New York Representative Mike Lawler.

I will note that we reached out to several Democratic representatives for today's show, none of whom were available to attend.

Nevertheless, we welcome you both.

Gentlemen, we look forward to a good conversation.

So let's just jump right in.

Mike Christine, tell me, how does a government shutdown affect the lives of everyday Americans who get a paycheck from the government?

CHRISTINE: Well, that's the biggest problem - we don't get a paycheck.

Right now, our air traffic controllers continue to show up every day and do the amazing work that the American public deserves.

The flying public needs us, and we're showing up.

KATKO: Mike Lawler, tell us, the government shutdown, can it avoided?

Should it be avoided under all circumstances?

LAWLER: Yeah, it should be.

I've always been opposed to it, no matter which party is in charge or what the rationale.

When Republicans tried to shut the government down over Joe Biden's open border policies, I opposed it, not because I disagreed with their position, but because a government shutdown wasn't going to solve it, and it was going to create havoc.

Here, Democrats have shut the government down proclaiming it's over health care, when in fact, it's really about standing up to President Trump for their base, and it's wrong.

I've opposed it regardless who the president is.

I voted eight times under Joe Biden to keep the government open and funded, and I voted under President Trump to do it.

Our federal workforce deserves to be paid.

Mike and the air traffic controllers do a phenomenal job.

They shouldn't have to choose between showing up to work and not collecting a paycheck, or staying home and figuring out how to make ends meet.

and pay their bills.

It's wrong.

KATKO: So, a little pushback - if that's how you feel, why not just give the Democrats what they want to make sure the lights stay on in the government?

LAWLER: Well, House Republicans passed a clean continuing resolution over a month ago, John, to keep the government open and funded.

I already signed on to a bill that would extend the ACA subsidies by a year.

But you don't negotiate at the barrel of a gun, and you don't hold the American people hostage.

Chuck Schumer and Hakeem Jeffries have said repeatedly about the need to pass clean CRs.

They always voted for them, 13 times under Joe Biden.

Suddenly, they've changed their position on this because they're trying to appease their base and it's just wrong.

It's not the way to govern, it's not the way to negotiate.

KATKO: Mike Christine, can you give us more of a feel for the impact on your employees at the Air Traffic Controllers Association?

What's it like for them to work without a paycheck, and what's the effect on their home lives?

CHRISTINE: Yeah, our jobs are stressful, to say the least, under ideal conditions.

We're trained to, when we get into the control tower, put that headset on and check all that at the door.

But when you start not knowing how you're going to put food on the table or pay your mortgage, it gets really real.

We're used to dealing with variables like weather, equipment outages and runway construction.

We're used to that.

Every day is different in air traffic control, and that's what makes it so great.

Our men and women are phenomenal at doing their jobs to make it work, There is a ton of pressure on us, and this shutdown is not helping us at all.

You know, our equipment is old, our towers are dilapidated, and the men and women controlling the skies are the only thing making this happen.

KATKO: Mike Christine, do you think lawmakers understand the realities of what your industry and other industries face during shutdowns?

CHRISTINE: I think they do.

It's not the first time it's happened.

Unfortunately, our controllers are stuck in the middle, and all federal employees are either excepted or furloughed.

We're humans first and foremost.

We're fathers, we're mothers, and we have to provide for our families.

This just doesn't change.

Our country is relying on us as air traffic controllers.

We're showing up, making sure everyone gets to their destination, and keeping our economy rolling.

But it's on the backs of our controllers.

KATKO: Mike Lawler?

LAWLER: No question, Mike is 100% correct.

It's part of the reason why I've forgone my pay during this shutdown.

If our federal workforce is not being paid, neither should members of Congress.

But again, this is all avoidable.

I think the Senate could pass a clean CR today.

The House has already done so.

But we've really got to avoid this in the future.

I think it would really behoove us to pass legislation to ensure that any time government funding expires, it automatically continues at the current level so that we don't have this continued tit-for-tat or the prospects of a shutdown that impacts the federal workforce and the American people, especially those who rely on critical programs like WIC or SNAP, which could run out of funding, or our military not getting paid.

This is unnecessary pain, and it's why I've always opposed government shutdowns.

KATKO: So, Mike, I want to make sure I understand this.

Mike Lawler, the House of Representatives has already passed a clean CR, and it went over to the Senate.

And that's where things are getting mucked up.

Is that right?

LAWLER: Correct.

The Senate has voted twelve times as of this count not to keep the government open, with nearly every Democrat voting to shut the government down - all because Chuck Schumer is trying to appease his far-left base.

They could pass the clean CR, as they did thirteen times under Joe Biden, so we can get back to work, negotiate on these issues, including on health care, which I've signed on to legislation to extend the subsidies so that we can ensure Americans don't pay a higher premium.

But a lot of these issues need to be negotiated with an open government, not at the end of a barrel of a gun.

KATKO: So, the pressure that people face in these situations is pretty immense.

In Congress, is that right?

LAWLER: No question it's difficult.

You see the impact it has on your community, on your district, on your constituents.

We have people reaching out, concerned about funding for critical programs that they rely on, like WIC, like SNAP, and military families who rely on that paycheck to make ends meet.

This should not be happening.

Our air traffic controllers shouldn't have to worry about whether or not they can show up to work because they can't pay their mortgage.

So This needs to be resolved, and it needs to be resolved immediately.

The House passed the clean CR over a month ago.

The Senate could do it today and bring this to an end.

KATKO: So how would you fix this, Mike Lawler?

And I want to hear Mike Christine's take as well.

How can we fix this to stop this cycle, which seems to be increasing in the last few election years?

How do we fix government shutdowns once and for all, Congressman?

LAWLER: Well, as Congress has gotten more partisan and more divided, and with smaller majorities, this type of thing keeps happening more frequently, and it's wrong.

To me, I think there's a very simple way to fix it, which is to pass legislation that would allow for continuing appropriations if Congress fails to pass appropriations by the September 30th deadline.

That way, funding stays at current levels, and we don't have a shutdown unnecessarily.

Then Congress can finish its work and pass appropriations for the next fiscal year without the prospect of a shutdown.

KATKO: Mike Christine, your thoughts?

CHRISTINE: Yeah, my thoughts are clear.

Federal employees continue to show up to work every day during this, so I expect Congress to do the same.

Putting us in the middle every time there's a disagreement is cruel.

So anything we can do to end this shutdown and all future shutdowns, I'm all for.

KATKO: Mike Lawler, we've got about 20 seconds left.

Mike Christine, just quickly tell us - has the shutdown impacted our safety at all?

CHRISTINE: Absolutely not.

Our controllers do a phenomenal job making sure that if we have any kind of shortage, weather issue, or equipment outage, we're able to pivot very quickly, either by reducing arrivals, departures, or volume complexity.

We're used to doing that every day.

We didn't become 3,800 controllers short overnight.

We've been dealing with this for many, many years.

And it is 100% completely safe to fly.

KATKO: Well, gentlemen, we thank you both for your service to the country.

We hope this gets resolved very soon.

Now it's time for My Take.

♪ ♪ KATKO: Federal government shutdowns are almost always about politics, with both sides of the aisle trying to score points or force reforms they couldn't achieve through the normal legislative process.

Take, for example, the current shutdown centered on proposed changes to Obamacare.

The amount of waste and inefficiency that occurs during a shutdown is mind-boggling, and forcing federal employees to work without pay is simply absurd.

While there's plenty of blame to Go around for sure, let's focus on a Manhattan solution instead.

How about passing a law that requires a federal budget to be approved by October 1st, the start of the new fiscal year?

If that deadline isn't met, make it mandatory for the government to keep operating under a continuing resolution until a budget is passed.

That would put a halt to the endless games and political theater surrounding the budget process.

We would never get away with running a business or even our own household finances the way Washington runs the federal budget.

It's time to fix it once and for all and make our leaders more responsible stewards of the people's purse.

And that's my take.

♪ ♪ KATKO: Now for a look at what's happening next week in Washington.

We have Bloomberg's Catherine Luce.

Welcome, Catherine.

Let's jump right into what's going on.

LUCEY: Hey there.

It's great to be here.

Well, we expect another busy week next week, both abroad and at home.

The top thing we're watching is President Trump traveling in Asia, where he may have a meeting with Chinese leader Xi Jinping.

This meeting obviously comes after a very tense stretch in the U.S.-China relationship.

Both sides have been issuing trade threats - China has been making threats about rare earths, and the U.S.

on tariffs.

We'll see if they can get together on any of those things.

President Trump has said he has a number of issues he wants to address with China, including rare earths, fentanyl, soybeans, and Taiwan.

Of course, I have to say, as always with President Trump, this meeting remains a bit of a "will they, won't they."

Trump has also at times threatened to pull out altogether.

So we're waiting to see if that happens and, if so, how it could impact the global trading relationship.

Another issue on the global front is Trump's efforts with the Ukraine-Russia conflict.

He has said he would be interested in meeting with Putin, but the White House is signaling that's not imminent at the moment.

And then at home, the big thing remains the government shutdown, which seems like it will still be going.

Both sides remain very dug in.

Democrats say they want to negotiate on health care subsidies.

Republicans say they want to open the government before there's any negotiation.

President Trump, for now, has been staying out of the fray but has been sticking by Republicans on the Hill.

And one other thing we're seeing in Washington is a lot of construction downtown, as President Trump is continuing Moving forward with his renovations at the White House where he's adding a ballroom.

He just can't help himself when it comes to developing, I guess.

KATKO: With regard to the Asia trip, it seems like the administration is all over the map with respect to the sanctions and whether there's a deal or not.

It seems very hard to predict what's actually going to happen with respect to the negotiations with China.

LUCEY: I think that's true.

Some of that is the way Trump likes it.

I think he likes to sort of racquet up threats.

He likes to try and push these countries.

He feels like he's had a lot of success with his trade war and tariffs in other parts of the world.

So he really wants to prove that he can get some concessions out of China.

We're going to see.

This is a complicated relationship, but these two leaders know each other quite well.

This is not the first time they will be meeting.

They've spent time together during the first Trump administration.

But certainly, if this meeting comes off, it could have really significant impacts on the global economy.

KATKO: Catherine Luce from Bloomberg News, thanks so much.

We'll see you next time.

LUCE: Thank you.

KATKO: Well, that's all for this week, folks.

To send in your comments for the show or see Balancing Act extras and exclusives, follow us on social media or go to balancingactwithjohnkatko.com.

Thank you so much for joining us.

And remember, in the circus that is politics, there's always a Balancing Act.

I'm John Katko.

We'll see you next time, America.