New House Members May Soon Go to Government Shutdown School

One of the top accounting policy specialists in the country thinks the chance that the U.S. government will shut down in the next few weeks is greater than 50%.

Libby Coffin, principal-in-charge at KPMG’s office of government affairs and public policy, acknowledged that lawmakers could put off a shutdown by passing one or more “continuing resolutions,” or short-term spending measures.

But each continuing resolution could lead to a new fiscal cliff, and “each one of those cliffs offers an opportunity for the government machinery to grind to a halt,” Coffin said last week at a KPMG insurance conference, which took place in Orlando, Florida, and was streamed on the web.

The U.S. government last shut down in December 2018. Coffin said one reason the government is in so much danger of a shutdown now is that new members enter the U.S. House every two years.

“You always have folks who have not touched the hot stove, so they don’t necessarily understand that government shutdowns will bring consequences, maybe to them, that they have not understood,” Coffin said. “Some of them are just going to need to touch the hot stove, and feel the backlash of their constituents, to motivate them to move off of their positions and compromise.”

What It Means

The way for life and annuity players to win friends on Capitol Hill over the next few weeks might be to help lawmakers figure out ways to get their hands off the stove.

Libby Coffin

Coffin, who earlier in her career served as tax counsel on the U.S. House Ways and Means Committee, leads KPGM’s Office of Government Affairs and Public Policy.

As head of that office, she oversees KPMG’s global, state and local government and public policy affairs activities as well as federal government and public affairs activities.

The History

Coffin said Congress created the looming fiscal cliff in the summer, when Democrats and Republicans averted a U.S. government default on bond payments by passing the Fiscal Responsibility Act.

The act includes spending caps.

Republicans and Democrats in the Senate have responded by moving ahead smoothly with their spending bills, but House Republicans have been unable to unite behind a bill they can get through the House, let alone a bill that can get through the Senate and be signed into law, Coffin said.