Government shutdown could hurt Republicans' chances in 2024 election, analysts say

By Victor Reklaitis

Are there parallels with the 1996 election, which came after shutdown drama?

Which party could get punished at the polls next year if there's a partial government shutdown this year?

"None of the government shutdowns since 1995 have ever resulted in conventional wisdom saying that was a positive for Republicans," Ed Mills, Washington policy analyst for Raymond James, told MarketWatch. "Republicans seem to get blamed for government shutdowns."

Greg Valliere, chief U.S. policy strategist at AGF Investments, also views the GOP as poised to shoot itself in the foot.

"Republicans have a chance of success in the 2024 elections -- which could be thwarted if they shut down the government and pursue impeachment," Valliere said in a note on Tuesday, referring both to a possible shutdown and to the potential for an impeachment inquiry as the House GOP probes the financial affairs of President Joe Biden and his family.

Beyond the presidential race in 2024, which could be a rematch of 2020's contest between Biden and former President Donald Trump, Republicans will be aiming to keep their slim majority in the House of Representatives and take control of the narrowly divided Senate. The nonpartisan Cook Political Report has said Democrats will be "almost entirely on defense" in the Senate, with a number of incumbent Democratic senators facing competitive races, while GOP incumbents are expected to have easier paths to victory.

U.S. lawmakers are getting back to work this week on Capitol Hill, and expectations are growing that there will be a partial government shutdown on Oct. 1, when the federal government's fiscal year starts.

See:Congress returns to face shutdown fears -- here's what it means for markets

House Speaker Kevin McCarthy has raised the idea of a short-term funding bill with his fellow Republicans that would keep the government open, but the House Freedom Caucus, a hardline GOP group, has voiced objections.

In 1995, budget disagreements between President Bill Clinton and congressional Republicans led to a five-day shutdown that started in mid-November and a 21-day shutdown that began in mid-December.

Clinton adviser George Stephanopoulos later wrote in a memoir that the shutdown helped the Democratic incumbent beat GOP challenger Bob Dole in the 1996 White House race, saying Dole appeared "joined at the hip with Newt Gingrich" and "captive to the most extreme forces in his party." Gingrich, a Georgia Republican, was the House speaker during that period.

On the other hand, Gingrich later wrote that people "who claim that the shutdown was politically disastrous for Republicans ignore the fact that our House seat losses in 1996 were in the single digits."

From MarketWatch's archives (January 2019): The latest government shutdown is ending, after becoming the longest on record -- by a wide margin

-Victor Reklaitis

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09-06-23 0824ET

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