The shutdown might happen because a short-term funding measure passed three weeks ago by Congress is set to expire at midnight Friday. Negotiations continued into Wednesday night, as congressional leaders met with Obama to discuss the stalemate.

“This is absolutely the wrong time for there to be such uncertainty,” said Lisa Cook, an assistant professor who holds joint appointments in MSU’s Department of Economics and James Madison College.

Damage to the economy is likely, Cook said, for psychological reasons. A prime example includes the fact that taxes are due in less than two weeks. Consumers waiting for a tax refund or waiting to file their taxes might be less likely to spend because the tax-handling Internal Revenue Service will not operate during a shutdown.

That spending decrease applies to more than just people waiting for a tax return, said Cook, who has previously worked with the Department of Treasury under former presidents Bill Clinton and George W. Bush.

“People hold onto their money because they are uncertain,” she said. “And we need people to keep spending.”

But MSU as an institution likely will not be immediately impacted by a government shutdown should one occur, university spokesman Kent Cassella said. Still, possible damage by a prolonged shutdown is difficult to predict, he said.

“It’s kind of early to speculate,” Cassella said. “A lot can happen between now and midnight on Friday.”

Still, the expiring measure is the sixth such resolution since December 2010, but extensive political sniping and conflicting ideologies are helping set this battle apart, said Benjamin Kleinerman, an MSU assistant professor of political science.

Republicans control the House, and a conservative faction of the chamber’s members might be encouraging a shutdown to prove a point on what they deem as harm caused by excessive government spending, Kleinerman said.

Another problem lies within Republican leaders’ attempts to gain widespread budget concessions from the Democratic Senate and Obama, concessions Kleinerman said the GOP is unlikely to get.
The last federal government shutdown went from mid-December 1995 to early January 1996. A Republican-controlled Congress sparred with Clinton on key funding issues, Kleinerman said.

Although some Republicans might be counting on the debacle to deal blows to Democrats and Obama, Kleinerman said there’s always a chance that plan might backfire. That backfire ostensibly, though, would have to come with some work by the president.

“It remains to be seen whether they’re right about that,” Kleinerman said. “It seems to me that Obama will end up looking better if there’s a government shutdown. But maybe I’m wrong.”