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The Tea Party claims victory - but will the last laugh be Obama’s?

A Tea Party supporter takes part in a rally in Washington’s Capitol Hill. AAP

To outsiders looking in, the recent crisis in governance in the United States surrounding the debt ceiling might appear to be a farce, if the stakes were not actually so serious.

Until Tuesday (EST), the US government stood on the brink of default; now a deal has been struck that significantly reduces the federal deficit by cutting domestic spending but not increasing taxes.

There is no question that this deal is a Republican policy victory. The force behind this modern day fiscal revolt was the Tea Party, a loosely confederated movement that sprung up in response to the Obama presidential victory and subsequent corporate bailouts, stimulus package, and health care reform bill.

The Tea Party movement was able to grow so quickly because the American public has not been persuaded that President Obama’s fiscal program, enacted by the Democratic majority in Congress in 2009-2010, has improved the economy or their individual lives.

Candidates fueled by Tea Party energy and activism challenged mainstream Republican candidates in the party primary process and went on to defeat Democratic incumbents in the general congressional elections in November 2010.

The Republicans regained majority control of the House with 87 new members; unlike the Gingrich Revolution of 1994, these freshman members did not feel they owed anything to their Washington based party leaders.

Instead, they were free agents who believe they were given the simple instruction to reduce federal spending by the voters who sent them to Washington.

When they arrived, they ran into the mountain that is now the federally-held debt.

To recap on how the “trouble” started: in May 2011, the Obama administration requested an increase to the debt limit from $14.3 trillion to $16.7 trillion.

If one includes the entire range of federal debt, the $14.3 trillion now comprises 92% of US Gross Domestic Product (GDP). The Republicans rejected that request, and made it clear that they would not approve a debt ceiling increase without commensurate decreases in federal spending.

This was the first time that Congress had actually refused to raise the debt ceiling; in the previous 18 years, Congress raised the debt ceiling 16 times, mostly under a Republican majority in Congress.

Shortly after, the US Treasury Secretary Timothy Geithner then announced that the US could last until August 2 before it would literally run out of money to pay its debt service.

Negotiations commenced between President Obama, Speaker John Boehner (Republican), Senate Majority Leader Harry Reid (Democrat) and Senate Minority Leader Mitch McConnell (Republican). The US Senate is controlled by the Democratic Party.

Republican Speaker John Boehner was forced to recast his position. AAP

It was assumed that Speaker Boehner spoke for his majority party, and any deal he agreed to would pass the House.

But as the deadline approached, Boehner was forced to recast his negotiating position; even when a deal was struck, Boehner returned to the House only to find he could not persuade his Tea Party contingent to support him.

What makes this crop of Republican freshman so different from their 1994 predecessors is the apparent absence of a re-election motive.

Without the re-election motive, party leaders have little to offer their new members to spur cooperation, such as campaign funds and key committee assignments, and that leaves a majority party institution like the House of Representatives in chaos.

More broadly, directly elected democratic institutions rely - if not absolutely depend - on the re-election motive to hold members accountable and responsible for the aggregate product of their chamber.

Still, if the Tea Partiers decide they like the taste of victory, the localised nature of congressional elections likely means they can win re-election and keep the House in Republican hands.

On the Senate side, the Tea Party has fewer members but there are almost twice as many Democratically held seats up for grabs as Republican so it is more than likely that the Republicans win control of the Senate as well.

However, at the presidential level, it is simply not clear yet how strong the Tea Party will be in the Republican presidential nominating process, and whether they are now viewed by the wider American electorate as too extreme and dangerous to be given the reins to all three branches of government.

Public frustration with the impasse has prompted various reactions.

Given the public’s overwhelming reaction to the extended debt ceiling negotiations, it may be that the Tea Party members in Congress won in the short term, but their indifference to the economic reputation and stability of the US federal government may undermine their longer term goal of becoming a majority party in American politics.

It would of course be the ultimate irony if the conservative wing of the Republican Party’s policy victory in the debt ceiling negotiations helps facilitate the reelection of the incumbent Democratic president.

It happened in 1996 for Bill Clinton, and it may very well happen again for Barack Obama.

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