Why Obama Should Let the Government Shut Down

While the debate over Syria may have overshadowed the expected battle in Washington over budget cuts, the logjam between Democrats and Republicans on fiscal matters is far from being resolved, and is likely going to get worse. However, this also presents President Obama with a unique opportunity to obtain real leverage with Republicans this fall, and to break the logjam permanently.

To do this, he needs to let the government shut down.

If that sounds extreme, consider the recent decision by conservative members of the House to postpone a vote on Majority Leader Eric Cantor's plan to fund the government through mid-December. The proposal was rebuffed because it would enable the Democratic controlled Senate to exclude a provision to defund Obamacare when presenting it to the White House for approval; this despite the fact that a continuing resolution to carry us through December would maintain the lower level of spending that Republicans want and despite the silliness of expecting the president to defund his own signature law.

But even if Obamacare was not the main issue and even if the House approves a continuing resolution, it is a safe bet that the same fight will play out again at the end of this year over raising the federal debt ceiling -- an ugly hostage-taking drama that we have seen before. The GOP will not relent until Obama is willing to cut much deeper into the federal budget than he deems sensible and very likely not until he hits bone, and that is definitely not in the best interests of our nation. It is imperative, therefore, for the president to put an end to this, and the only way to really do that is by calling the opposition's bluff.

There are several reasons why a government shutdown would actually work in Obama's favor:

1. A government shutdown may be the most potent weapon in the GOP's arsenal but once invoked, it really cannot be used again in the near future (not without severe political carnage); and so by letting it happen, Obama can finally eliminate the biggest threat that Republicans have used to derail his agenda. Getting rid of this Democles' Sword hanging over his administration would benefit Obama on all issues, not just fiscal ones.
2. A recent CNN/ORC International Poll shows that 51 percent of Americans consider the Republicans more responsible for a potential government shutdown than the Democrats, which gives Obama slim but palpable political cover if it comes to pass. With a full year to go before the next midterm elections and three years till the presidential race, both parties have time to recover from the fallout of a shutdown, but I predict that the Republicans will take a more permanent hit -- largely because of their sustained obstructionism over the past five years.
3. The U.S. government shutdown on December 16, 1995 (that lasted for 28 days) under President Clinton over similar budget battles with the Republican party, though frightening, did not destroy the nation, and even though the public initially seemed to blame the president for the impasse, Clinton's approval ratings shot up dramatically after the shutdown was resolved, and the Republicans were excoriated for their obstinacy. In hindsight, it was a win for Clinton.
4. By refusing to let the GOP use Obamacare or the debt ceiling to secure spending cuts, the president will have demonstrated his resolve not to let policy decisions be influenced by political blackmail, hopefully changing the style of governing in Washington for the better.
5. A shutdown would also show the Tea Party base of the GOP, which is driving the push for steep budget cuts at all costs, how damaging the politics of extremism can really be. This is not an act of punishment but an act of education. It is highly ironic that those clamoring the hardest for defunding the government are those who depend the most heavily on the public services provided by it -- in other words, average Americans -- and yet a lot of those people continue to live in a utopian fantasy world. A small dose of a shutdown, then, might well be good for waking people up and for America's health in the long run. It is easy for the Tea Party to rally support behind an abstract revolution but it will be much harder to do so when the results of such a revolution hit the personal welfare of voters.

With three years left in his term, President Obama is at a crucial crossroads. The outcome of the upcoming budget battle will determine whether our nation remains stuck in neutral for the remainder of Obama's term on budgetary issues, lurching from one manufactured crisis to the next, or whether the president can finally force the Republicans to bargain more reasonably and govern cooperatively with the Democrats. Continuing resolutions will accomplish nothing and if the president is serious about his economic vision for America, then he needs to act proactively here, and really force the GOP's hand.

By not being afraid to shut down Washington.

SANJAY SANGHOEE is a political and business commentator. He has worked at leading investment banks as well as at a multi-billion dollar hedge fund. He has appeared on CNBC's 'Closing Bell', Arise TV, and HuffPost Live on business topics, and is the author of two thriller novels, including "Killing Wall Street." For more information, please visit www.sanghoee.com