The political stalemate in the debt ceiling crisis

By Alexander Bryan

On Monday night, President Obama and House Speaker John Boehner both took to the airwaves and put forward their explanations of the debt crisis. The simple fact that the two figures most important in resolving this dispute were in separate buildings blaming each other rather than in one room trying to find a solution is perhaps indicative of the intense partisanship which has engulfed Washington, described by President Obama as ‘a town where compromise has become a dirty word’.

With barely a week until 2nd August, when America will begin defaulting on its debts, many are still hopeful that an agreement will be reached. If it is, it will more likely than not involve huge spending cuts, with some small tax rises. The Republican reluctance to compromise has resulted in Obama and other Democrats offering cuts to social security and other welfare programs, which has infuriated many within the Democratic Party.

But until an agreement is reached, the story at this stage is of paralysis in the American political system. That the world’s richest and most powerful nation can be within a week of not paying its debts is absurd. One of the necessities of American politics (and all nations with divided government) is compromise.

The ideological polarisation of American politics in recent years has meant that, on a national level, compromise is now almost impossible, regardless of the issue. Even on something which historically has been entirely uncontroversial – since 1980, the debt ceiling has been raised 39 times – members of Congress (particularly the House) have been unable to reconcile the gaping ideological divide between them.

The 2010 intake of Congress is the most ideologically vociferous for years, certainly since the last federal government shutdown in 1995/6. The zealotry of some of the new House Republicans is one of the central factors in this dispute. It seems clear that if a bill to raise the debt ceiling enough to prevent having to do so again before the 2012 election were to pass the House, the Senate would also pass it.

Clearly, many Republicans think that there is some political capital in opposing raising the debt ceiling; 2012 Presidential candidates Michelle Bachmann and Tim Pawlenty have both come out against a compromise. However, as the deadline steadily draws closer, the American public becomes more frightened of default.

A Wall Street Journal/NBC News poll shows that 55% of Americans feel that raising the debt ceiling would be a ‘real and serious problem’.  It may well be the case that opposing raising the debt ceiling will increase the popularity of Bachmann and Pawlenty with GOP supporters and Tea Party activists, but to many independent voters, it looks irresponsible. The fact that frontrunner Mitt Romney has remained silent on the issue suggests that he thinks that floating voters may see opposition to the debt ceiling rise as obstinance rather than courage.

The possible result of defaulting on loans is disputed, but few think it would be anything better than disastrous. Moody’s credit rating firm is already reviewing the AAA rating of the USA simply due to the fact that the crisis is not yet resolved, and Standard & Poor’s warned of a 50-50 chance that they would cut their AAA credit rating for America. Economically, default would destroy economic growth in America, and perhaps plunge the world into recession once more, just as it looked like recovery was on the horizon.

Politically, the results are less obvious. The most recent reference point for this crisis is the government shutdown of 1995/6, which involved a Democratic President and a Republican House. That time, Clinton managed to pin all of the blame on the Republicans. Whether Obama will be able to do the same now is doubtful. More than a guide to the future, this crisis simply tells us about the present and the recent past of American politics.

This is a politician’s crisis, entirely manufactured within Washington, by representatives who are too stubborn to do anything which conflicts with their sacred principles, even if it is absolutely necessary. President Obama was right on Monday when he said that in Washington, ‘compromise has become a dirty word’.

This is the problem. The machismo notion that any form of compromise is weak is not only unhealthy and dangerous, but, as the President said, it is ‘no way to run the greatest country on Earth’. Obama can want to compromise as much as he wants, but if the Republicans are not prepared to cede some ground, there is no point. It is irresponsible that America is in the situation it is in now. If this crisis is not resolved by 2nd August, it will be unforgivable.

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