The shutdown of the federal government is over and the debt ceiling has been increased:
On the brink of a debt default and after more than two weeks of a federal government shutdown, Congress finally approved a plan Wednesday evening to temporarily end both crises and restore some measure of normalcy to Washington.
The eleventh-hour deal was brokered by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky. It will fund the government through Jan. 15 and lift the debt ceiling through Feb. 7. It also officially reopened the government, allowing federal employees to head back to work Thursday.
The president has won. The Republicans have lost.
But what has been won?
The shutdown is over. The debt ceiling has been raised. In a few months a Senate panel will submit some suggestions for deficit reduction that the president will reject. We’ve seen this movie before. Some believe that the American public is so disgusted by the outrageous performance of the Congressional Republicans it will result in a Democratic wave in the midterm elections. Peter Beinart sees things a bit more as I do:
The promise of the Obama presidency was not merely that he’d bring Democrats back to power. It was that he’d usher in the first era of truly progressive public policy in decades. But the survival of Obamacare notwithstanding, Obama’s impending “victory†in the current standoff moves us further away from, not closer to, that goal.
It’s not just that Obama looks likely to accept the sequester cuts as the basis for future budget negotiations. It’s that while he’s been trying to reopen the government and prevent a debt default, his chances of passing any significant progressive legislation have receded. Despite overwhelming public support, gun control is dead. Comprehensive immigration reform, once considered the politically easy part of Obama’s second term agenda, looks unlikely. And the other items Obama trumpeted in this year’s state of the union address—climate change legislation, infrastructure investment, universal preschool, voting rights protections, a boost to the minimum wage—have been largely forgotten.
I don’t see that any new coalitions have been built or the framework established for future agreements.
I agree with the muted analysis of the so-called democratic win in these latest budgetary and debt ceiling disagreements. I guess, by some peoples’ measurements, when a presidential leader is immovable to all deals, except his own, even at the calculated cost of running the country into the ground, it automatically becomes a victory over the other side, when they yield in order to avoid the possibility of such a fiscal calamity from happening. In other words, ‘playing chicken’ has become a perfectly acceptable negotiating tool — preferred over diplomacy and played to the hilt by the current party in power.
Somehow, though, I don’t think there’s been much consideration given to how the other half of the country — those opposed to the ideology and political gambits this administration has forced upon them — as to what their reaction might be. Will they be cowed and more easily managed, or will their resolve only harden, to change the changes they have decried and openly resisted. Doesn’t a “take no prisoners’ kind of governing create more polarization, rather than less?
I’m further reminded of the Arab Spring, in which the Muslim Brotherhood’s candidate, Morsi won the presidency by almost the same percentage points as Obama did in his reelection bid. Much like Obama, Morsi saw his election as a platform to make many unilateral changes to government, against the people’s wishes. How did that “I won” attitude work out for him specifically, and generally for Egypt?
Every GOP deal offered so far has in lauded only items on their wish list. They are unwilling or unable to compromise on anything. Immigration reform should have been easy. The GOP even has a token Hispanic to lead the effort. Totally shot down. While there is support for background checks in the 80% range, the same minority in Congress will keep it from even being voted on. There will be no new major bills from this Congress. I am skeptical about the debt being addressed too.
Steve
Shorter: Obama wins political accolades, especially with his adoring press, and basks in self aggrandizement, but his legislative agenda battle was lost.
And February will come so fast it will make your head spin. Rinse, lather, repeat……
This country is underperforming economically with no material improvement relative to its finances in sight. We need maximum performance. As an LBO guy I’ve seen this movie before too. Its a tragedy. Sing hooray for our guy and spend and borrow if you like, but its been $7 trillion more debt in the blink of an eye, with all three major entitlements hurtling down the track.
You think this is some crazed Tea Party person talking?
Senator Barack Obama, in a speech on the Senate floor – 2006:
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘trillion’ with a ‘T.’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next five years, between now and 2011, the president’s budget will increase the debt by almost another $3.5 trillion.
“Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the federal government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated Gulf Coast in a way that honors the best of America.
“And the cost of our debt is one of the fastest-growing expenses in the federal budget. This rising debt is a hidden domestic enemy, robbing our cities and states of critical investments in infrastructure like bridges, ports and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.
“Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.
“But we are not doing that. Despite repeated efforts by Senators [Kent] Conrad and [Russ] Feingold, the Senate continues to reject a return to the common-sense pay-go rules that used to apply. Previously, pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the common-sense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.
“As a result, tax breaks have not been paid for by reductions in federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next five years.
“That is why I will once again co-sponsor the pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.
“Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just five years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.
“Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
“I therefore intend to oppose the effort to increase America’s debt limit.â€
$7 trillion – with a T – and now if you don’t go along with President Obama and Harry Reed’s request, you are a terrorist.
Spare me.
They are unwilling or unable to compromise on anything.
Translation: they don’t want to unconditionally give everything to the dems.
The GOP even has a token Hispanic to lead the effort.
Translation: Any form of diversity in the GOP membership is to automatically be considered ‘token’ people. After all, what person of color, in their right minds, would “see anything in the GOP”* that would propel them into becoming a conservative?
*….incorperating the revisionist history version denying that republicans ended slavery and were the party (not the pro Jim Crow dems) who continuously promoted civil rights, until it was passed in the 1960’s, by a greater percentage of republicans than dems.
I find it interesting that on the eve of an economic collapse the stock market rose significantly. Investors were buying stocks “hand over fist”. I saw one “expert” explain that the market had the post-deal bounce before the deal.
I saw something else about the horror inflicted by the shutdown will be substantial, but it will not be immediate. I suspect “not immediate” means years or decades.
These are the idiots that I am expected to regard as knowledgeable.
It gets worse, Tasty. Commentators informed us today that investors are today turning to “corporate profits,” as if they couldn’t walk and chew gum at the same time. But if you want to see the vanishingly small financial acumen of the general population go to the next essay and look at sam’s juvenile glee that somehow a “scam” has just been uncovered in the PE world (despite the fact that it is a well worn topic) and a complete misunderstanding of how the practice aligns and even protects the economic interests of investors and managers…………………..the very same investors that Dodd Frank has done so little to protect despite stated intentions.
When you have the sam’s of the world out there, those “experts” you guffaw at have plenty of fodder.