A plan to avert a US debt default and slash government spending has been signed into law by President Obama, but no one in Washington is claiming outright victory after months of bruising negotiations.
The United States narrowly avoided a catastrophic debt default -- with repercussions for the global economy -- just hours before the Tuesday deadline. As Washington breathed a sigh of relief, political commentators and analysts rushed to tally the winners and losers of the bruising and months-long debate over the country’s debt ceiling.
The plan — which allows the US government to raise by up to $2.4 trillion the current $14.3 trillion borrowing limit in order to cover its costs, including checks to military personnel and aid-dependent senior citizens — was approved by the Senate on Tuesday.
On Monday night, the measure cleared its most difficult hurdle when the Republican-controlled House of Representatives passed it with a 269-161 vote.
It calls for up to $2 trillion in government spending cuts over the next ten years. The cuts were widely seen as a blow to liberals who fear cutbacks to programmes for the nation’s poorest and those who advocate more spending as a way to jolt the sluggish US economy back to faster growth.
The law also foresees no new taxes to decrease the debt; a victory for conservatives, especially among Tea Party Republicans, who did not have to break their “no new taxes” promise to supporters who voted them into Congress last November.
But analysts remain unsure how the deal would affect the 2012 presidential election, in which US President Barack Obama hopes to win re-election. The new law raised the borrowing limit through 2013, allowing Democrats to avoid another government-paralysing debt fight during next year’s elections, yet it promises to make the national debt a top campaign issue.
A hit for Obama?
Minutes before signing the bill into law, Obama addressed journalists at the White House, but appeared far from satisfied over the negotiations. “It shouldn't take the risk of default, the risk of economic catastrophe, to get folks in this town to work together and do their jobs," Obama said.
According to Gallup’s latest survey, the president’s approval rating sank to a tenure-time low—40 percent—while lawmakers argued over cuts, taxes, spending and how long the new plan would last. The unusually quick fall in popularity was most pronounced among Democrats and independents.
“As the clock ticked towards the [Aug. 2] deadline people saw the effect the impasse had on the stock market,” says Jeff Jones, managing editor of Gallup Poll. Jones says Obama’s approval rating will likely return to its previous levels once the deal becomes law, and that watching the reactions of independents will be key.
Despite those sagging approval ratings, especially among disappointed liberals, analysts avoided adding Obama to the list of losers of the latest debt ceiling crisis.
“Remember that Obama’s target constituency in 2012 is not his base, but rather independent and moderate voters. And those fence-sitters love compromise in almost any form,” wrote Washington Post political blogger Chris Cillizza.
Moreover, any damage to Obama was offset by even worse approval ratings for the US Congress. While Republican lawmakers rushed in front of cameras to sell the debt deal as a victory for their camp on Monday, Gallup’s Jones indicated that approval ratings for House and Senate leaders were likely to have hit a historic low during negotiations.
At 18 percent, Congress’ approval rating in early July was “definitely on the low end historically,” according to Jones. “It’s a reasonable assumption that it is now lower because of the debt talks,” he told FRANCE 24.
Another Tea Party
Some observers railed against the Tea Party movement for the inflexibility that pushed the country to the brink of default. House Speaker John Boehner ran into trouble with the most conservative members of his Republican party during talks, and twice was forced to return to what he considered completed negotiations with Democrats.
Congressmen from the small government, anti-tax Tea Party Caucus wanted more spending cuts and bitterly fought for a balanced-budget amendment they knew had no chance of passing in the Senate.
New York Times columnist Paul Krugman’s comments on the debate were echoed by many left-leaning commentators:
“What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy?”
Despite the criticism over the Tea Partiers’ tactics, observers from both sides of the political spectrum agreed the ultra-conservative movement came out ahead in Washington after the crisis.
According to Brian Darling, a senior fellow for government studies at the right-wing Heritage Foundation, the infighting was “healthy debate” that has helped determine in what direction the Republican Party is moving. For Darling, the momentum is clearly toward those “younger, more aggressive” Tea Party members.
While managing to force deeper spending cuts than Boehner had advocated, Tea Partiers ended up voting against the final bill. Tea Party Caucus leader and presidential hopeful Michele Bachmann opposed the deal in the end: "It's time to stop the 'hot air' in Washington and let the winds of true change, economic growth and job creation spurred by the private market sweep through this country, she said. “Someone has to say NO to more spending. I will."
Date created : 2011-08-02