Do You Get It This Time?
by Mark Wilson
In the second of (so far) two Republican attempts to hold the economy hostage to extract concessions, they have agreed to a deal that would extend the debt limit through February and fund the government through January.
The prior attempt at brinksmanship resulted in Standard & Poor’s downgrading America’s credit rating—not because (as Fox News has opined) America has too much debt (though that was one factor), but because the uncertainty that attended whether America would default on its obligations, which the result of using the debt ceiling as a bargaining chip, spooked the international economy:
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
In fact, just yesterday the credit rating agency Fitch warned that it might also downgrade America’s credit rating. Again, not because there is too much debt, but because America might not be able to pay on its debt due to the debt ceiling not being raised:
When John Boehener and other Republicans began this government shutdown sojourn in September, they likely assumed that the force of public opinion would be with them (due to the Republicans’ knack for messaging) and that the Obama administration would have to cave.
By a 22-point margin (53-31 percent), the public blames the Republican Party more for the shutdown than President Barack Obama, according to a new NBC/Wall Street Journal poll. That’s a wider margin of blame for the GOP than the party received during the last shutdown in 1995-96.
Poll numbers show that approval for Republicans in Congress is at an all-time low, with the Republicans falling to the lowest approval rating in Gallup poll history.
So the question is: do they get it this time? Do they understand that their hostage-taking tactic (which, despite protestations to the contrary, is properly characterized as taking a hostage) didn’t work?