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Where to from here? The post-shutdown state of US politics

The confrontation - and the ultimate resolution - over the debt ceiling and the government shutdown has, to date, been the defining moment of US president Barack Obama’s second term. It offers an important…

Did US president Barack Obama and his Democratic Party emerge as victors from the now-concluded government shutdown and debt ceiling crisis? EPA/Martin H. Simon

The confrontation - and the ultimate resolution - over the debt ceiling and the government shutdown has, to date, been the defining moment of US president Barack Obama’s second term. It offers an important insight into the current state of US politics, for both the Democratic and Republican parties.

Late on Wednesday night (US time), the latest instalment in governing by crisis concluded in Washington when Congressional Republicans capitulated and agreed to pass a bill raising the debt ceiling and ending the 16-day government shutdown.

The episode was a stinging defeat for the Republican Party. Not only did they fail to delay “Obamacare” or secure any other major policy concessions, but they’ve also taken the brunt of the blame for the shutdown as well. Recent polls show both the Tea Party and the Republican Party, as a whole, have record-low approval ratings.

However, despite the debacle, the Republican Party’s immediate electoral prospects aren’t as bleak as they seem for two reasons. First, the 2014 mid-term elections are still over a year away, which leaves plenty of time for the political winds to shift and the shutdown to fate from voters' minds.

Second, the average Republican-controlled House seat is decidedly more conservative than the country as a whole, providing Republican members of Congress with a partial buffer from national political trends.

For Democrats to gain control of the House next November (they already hold the majority in the Senate), there needs to be a strong and sustained backlash against the Republicans. If voting were held today, America would very likely see that kind of swing. But 13 months out, the climate is much more uncertain.

Regardless, the failure of the Republicans' shutdown strategy is illustrative of the more long-term existential threat the party faces. As was made evident over the past two weeks, there is a significant divide between the views of the Republicans' Tea Party base and those of the American public. This is a gap that is likely to only grow as the country becomes increasingly ethnically diverse.

Republican moderates can certainly do more to disassociate themselves from the far-right flank of their party. However, the Tea Party isn’t simply a Republican fringe movement, but rather it is a significant and currently essential subset of the party’s electorate. With regards to the Tea Party, Republican leadership faces a “can’t live with them, can’t live without them” dilemma.

Speaker John Boehner and the Republicans may be divided, but don’t write off their electoral hopes for next year and beyond just yet. EPA/Michael Reynolds

To make matters worse, the Republicans managed to alienate both independents with its strong-arm debt ceiling tactics and hardliners upset that the party eventually caved. Party loyalists are now tasked with trying to mend relationships with centrists while simultaneously guarding their right flank against another round of primary challenges in the coming year.

None of this is to say a Republican candidate couldn’t win the presidency in 2016. Economic factors and other short term contingencies often outweigh larger political trends in any given election cycle. But until the party undergoes a difficult and potentially lengthy re-branding effort, it’s going to become progressively more difficult to compete on a national level.

Obama and the Democrats, on the other hand, emerged from the crisis in a much better position. It’s not that they are overwhelmingly popular: Obama’s approval rating sits at a tepid 43.4%, so much as that they aren’t the Republicans. Right now, that seems to be enough.

Democrats have also already capitalised on the standoff, using it as a tool to recruit new congressional candidates and raise money. As such, even if the shutdown has faded from the public consciousness by the next election cycle its impact could still be felt.

However, don’t expect recent events to spur any sort of major legislative progress. The two parties remain so deeply divided that it will take electoral change to bring an end to the gridlock. At this point, the most one can realistically hope for is that things remain civil enough to avert another shutdown or financial catastrophe in the next few months.

It’s certainly not much, but compared to where America was just a few days ago, it sounds blissful.

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12 Comments sorted by

  1. Dale Bloom


    The name “Tea Party” is partly to based on “Taxed Enough Already”

    Looking at the “Long Term Budget Outlook” prepared by the Congressional Office, spending will continue to outstrip current revenue for many years.

    That will result in more debt, and more money that has to be raised by raising taxes.

    As taxes go up, and more money is taken from other government programs to pay for interest on loans, the public will begin to feel it, and more members of public will begin to think about the Tea Party.

    But that is politics in the US, and best for Australia to objectively study the situation to see what should not be done in this country.

    At present, very little of what the US does should be copied by this country.

    1. Account Deleted

      logged in via email

      In reply to Dale Bloom

      I think you are confusing absolute amounts (amount of debt) with relative amounts (proportion of income that goes to service debt). As long as US GDP grows at or faster than the rate of debt increase, the amount (in terms of a % of people's/national income) that has to be collected in tax stays the same or decreases.

    2. Dale Bloom


      In reply to Account Deleted

      “The gap between federal spending and revenues would widen steadily after 2015 under the assumptions of the extended baseline, CBO projects. By 2038, the deficit would be 6½ percent of GDP, larger than in any year between 1947 and 2008, and federal debt held by the public would reach 100 percent of GDP, more than in any year except 1945 and 1946. With such large deficits, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable.”

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    3. Account Deleted

      logged in via email

      In reply to Dale Bloom

      No disagreement that the health bills are related to obesity, etc, which are themselves related to poverty.
      I'm not particularly spooked by very long-term budget projections as any small current imbalance (negative or positive) will always either go to infinity or to zero in the indefinite future. Policies will have changed long before then.

    4. Dale Bloom


      In reply to Account Deleted

      Here is a US budget breakdown up to 2023.

      Like many other countries, the US government has falling revenue and increased costs. The biggest costs become health, education and welfare.

      There is a theory that industrialized countries reach a peak in employment, and then employment declines in time.

      “In the United States, manufacturing employed less than 3% of the labor force in the early nineteenth century…

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  2. Stephen Ralph

    carer at n/a

    Where to - how about growing up for a start.

    The governing of America seems to have been given over to a bunch of kindy students.

  3. David Stein


    Luke, don't listen to those saying there is an existential threat to the Republicans. It might make good copy, but just isn't true. And as for saying the average Republican district is on average more conservative and thereby provides a buffer - well of course! It's like saying the average coalition seat is more conservative.
    The key point to share with readers is US parties are much broader churches than in Australia and every congressman's vote is essentially a conscience vote. I pity the…

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  4. Gary Murphy

    Independent Thinker

    I am confused.

    The US budget deficit is around $750 Billion a year ($62 Billion a month).

    The QE stimulus is $85 Billion a month.

    Why do they need to increase the debt ceiling? Shouldn't the debt level be reducing?

    1. Gary Murphy

      Independent Thinker

      In reply to Gary Murphy

      I think I see - the money that is being used by the reserve to purchase bonds is still classified as a debt. So who is it owed to?

      No - that isn't right. The Federal Reserve is buying the bonds so they hold the government debt. So the government owes the money - TO ITSELF. Brilliant.

    2. David Stein


      In reply to Gary Murphy

      In a nutshell, the US Treasury creates the bonds which the Fed then purchases. Note that the Fed does not purchase all the Treasury bonds on issue at each auction; funds like Pimco and foreign central banks purchase Treasury notes as well.
      But keeping it simple, the Fed has trillions of assets on its balance sheet from Treasury bond purchases while the Treasury has trillions of liabilities from sales of its bonds. (The reason this is important is the Fed can then deal with the bonds in the event inflation ever becomes a problem.)
      The Congress is required to give approval for the Treasury to sell debt (bonds) in excess of a ceiling $ amount. The fact that the Fed is purchasing the bonds does not mean one can cancel the other out.

    3. Stephen Ralph

      carer at n/a

      In reply to David Stein

      Way too complex for a man on a pension....
      but to my mind it does sound like robbing Peter to pay Paul.
      Bit like stock markets........great when they are up, disastrous when they are down.

      And does anyone know who's controlling either?

  5. Louise O'Brien

    Marketer.Communicator. Observer

    It was interesting that quite a few of the American news commentators spoke about the parliamentary system of government and what a difference it would have made to the current financial problems facing America.

    The current situation in America has members of congress who are funded by various lobby groups battling it out so that their lobby group is not the one that has their government funding cut. Members of US Congress cannot get into government without funding from a major organisation/lobby…

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