Clinton: Shutdown would hurt GOP but might not be 'traumatic' for economy

A government shutdown might not have a "traumatic" effect on the economy, former President Bill Clinton said Monday. 

Clinton, who faced a shutdown during his 1995 budget negotiations with congressional Republicans, said he wasn't sure whether President Obama was giving too much ground to the GOP in current negotiations, but suggested that a shutdown could backfire against Republicans, much as it did in the '90s. 

"It will not have the traumatic effect it probably had last time," Clinton said during an appearance on ABC's "Good Morning America." He said changes had been made to the system that would ease the hardships brought about by a shutdown.

The federal government experienced two shutdowns in late 1995. The first lasted five days, while the second lasted 22 days and carried into early 1996. In both cases, Clinton clashed with Republicans in Congress, principally then-House Speaker Newt Gingrich (R-Ga.). 

Later in 1996, Clinton cruised to a second term after the shutdown appeared to boost his political strength while dimming Gingrich's star.

It is unclear which party would suffer the most this year if there is a shutdown. 

Both Obama and GOP leaders in the House, mindful of the thorny political realities of 1995, have avoided a shutdown by passing a series of short-term measures extending government spending. But the latest extension expires on Friday, and lawmakers in both parties have expressed little appetite for another short-term continuing resolution.

If an agreement can't be struck, the government would shut down after April 8. 

Clinton predicted that Republicans could again be hurt the most politically. 

"I think it could hurt the Republicans if it looks like the Democrats have a reasonable offer," he explained.

Gingrich said last month that he remembered the outcome of the 1995 and 1996 battles differently.

"When people say to me, 'Boy, that was really politically expensive,' my question is to who? Our base wanted somebody who was serious, and this is part of what's going on in the country right now," he said.

Even if Congress and the White House can reach an agreement, they face additional challenges in the form of having to raise the debt ceiling and authorize a new budget for the next fiscal year. Raising the debt limit could carry additional political risk for the GOP, Clinton argued.

"If the Republicans want to refuse to raise the debt limit, they are playing Russian roulette with our economy," he said.

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