Government shutdowns: Boehner vs. Gingrich

By Tory Newmyer, writer

FORTUNE -- With only hours to go before a shutdown, Republicans and Democrats on Capitol Hill still haven't struck a deal to fund the federal government. The round-the-clock backroom negotiating between the two sides continues -- and an agreement is reportedly within reach.

But the parties are also intensifying their public bluster over which side deserves the blame for the deadlock and its potential fallout. As the nation braces for the first government shutdown in 15 years, Fortune spoke to David Gergen -- director of the Harvard Kennedy School's Center for Public Leadership and adviser to presidents Richard Nixon, Gerald Ford, Ronald Reagan, and Bill Clinton -- about the political and economic stakes.

How does this potential shutdown compare to the one that President Clinton presided over?

There's going to be some last minute maneuvering by both sides as we head into a shutdown, but there's no question the atmosphere is very different from 1995-1996. Then, you had a President who was very tactically adept at politics facing a Speaker in Newt Gingrich who was seen as bold but also sometimes overplayed his hand. So Clinton was able to outmaneuver him, and it really stopped the momentum of the Republican House victory of 1994.

In this case, you have a President who has intentionally stayed much more on the sidelines. He's much more comfortable standing on principle than engaging in tactical maneuvers. And you have a Speaker who's learned from Gingrich's experience and knows he needs to make every attempt in his public appearances to appear reasonable.

What lessons should Obama take from Clinton's victory in his fight?

That showdown didn't break until the shutdown occurred. That's when people began to focus. There's been such big economic and political news from around the world, I don't think the public is paying much attention yet this time. If the government shuts down, Obama has to keep the negotiations going day after day after day. He'll get credit for forcing people to sit in a room, knocking heads together, and making a deal.

Which party is more vulnerable at the moment?

Based on what we've seen so far, both parties are going to share in the blame. Obama is really setting up the closure as coming from stubbornness and willfulness by the Republicans to try to shut it down. Boehner is making the contrast that he doesn't want to shut down, and he's got a public much more sympathetic to him than they were to Gingrich. But Obama has been smart to engage in the last few days and to bring people to the White House. He had been vulnerable to the charge Boehner was making that he's passive. Obama has played this above-the-fray, I'm-the-adult-game. It's not compelling, but it's helped him.

If this comes down to policy riders, that redounds to the benefit of the Democrats. Most Americans will say, "I thought this was a budget fight." Democrats are pointing to that, and Boehner's trying to keep the focus on the numbers.

How would a shutdown likely impact the next big debate, over the deficit and entitlements?

It depends on how this thing breaks out. If Obama walks away with some of the blame, it will strengthen the Republicans' hand, and the reverse is true.

Goldman Sachs (GS, Fortune 500) has estimated a shutdown will cost the economy $8 billion a week in reduced federal spending. Does the President face a longer-term threat from the direct economic fallout of that drop-off?

The White House thinks growth this year is going to be close to 4%. I know serious economists who think it's going to be closer to 2%. If we come in with less than 3% growth, and it's tied to the shutdown, Obama will get some of the blame for that.

The President has been re-appropriating a buzzword his own corporate critics like to use, talking about the "uncertainty" that a shutdown would sow. Does he have a point it would have a psychological impact on business?

Yes. I think a lot of people in the corporate world will look at this say, "Why the hell can't they get their act together?" How could you be confident in our future when our leaders can't get together on something as small as this? It's small potatoes compared to what's coming. To top of page

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