News24

Debt debacle bruises Obama

2011-08-02 11:00

Washington - A bruised President Barack Obama pulled the US economy back from the brink of disaster with last-gasp debt deals, but at the cost of enraging his base by capitulating to foes ahead of his 2012 re-election bid, analysts said.

"He and the Democrats got rolled," political science professor Dante Scala at the University of New Hampshire said, offering his blunt assessment of Obama's efforts to secure a deal that meets fiscal and moral muster with his Democrats.

"In the short term, he has (taken a hit)," Scala said. Even with a deal crafted that would avert a calamitous first-ever US default, "he's certainly lost this particular battle".

Obama faces fury from liberals who tarred him as a spineless compromiser for dropping his demand for tax revenues from the wealthy to balance out spending cuts, even though he managed to raise the debt ceiling through the end of 2012, after the election, and keep entitlement programmes like Social Security and Medicare untouched.

Democratic Representative Emanuel Cleaver blasted the debt agreement as a "sugar-coated Satan sandwich", apparently echoing the sour feelings of several Obama allies in Congress.

The deal received equal ire from conservatives intent on reining in government costs. Several Republican 2012 presidential candidates came out against it, and the issue could prove a pivotal one during the
upcoming campaign season.

Victory for American people


With the eyes of the world on Washington as US lawmakers jousted over increasing the nation's ability to borrow money to pay its bills, Obama had been unable to get Congress to agree to raise the debt ceiling until just hours before a midnight Tuesday deadline.

In a cliffhanger vote late on Monday, the Republican-controlled House passed the legislation that raises the $14.3 trillion US debt ceiling and calls for $2.1 trillion in spending cuts over 10 years.

It now goes to the Democratic-led Senate, which is expected to approve the bill on Tuesday.

While the White House insisted on Monday that the deal was a "victory for the American people", the president is unlikely to take a victory lap over what for decades had been a far less exhausting political exercise.

Even his spokesperson Jay Carney effectively described the process as a disaster.

"This was a mess. There is no question. It was a circus at times," Carney told reporters.

Plunging approval rate

Republican Speaker of the House John Boehner walked out on White House debt ceiling talks last month, and the president saw his once-Midas touch evaporate.

Obama's approval rating plunged to a new low of 40%, according to the latest Gallup poll - although Congress's rating was even lower.

"His capacity to get legislation he wants through Congress seems profoundly damaged," associate professor Peter Kastor of Washington University in St Louis said.

"There is the sense that the narrative emerging about this seems to be out of the administration's control."

Obama took office in early 2009 with his Democratic Party fully in charge of Congress. He pushed through major contentious laws, including the $800bn economic stimulus package, Wall Street reform and the healthcare reform act.

But last November Republicans romped to victory in mid-term elections and wrested control of the House, where many freshman lawmakers are anti-tax "Tea Party" conservatives demanding more draconian spending cuts than their moderate colleagues.

Short-term loser

Earlier in 2010 during the Gulf of Mexico oil spill, Obama proved "a tough negotiator, unflinching, unafraid, authoritative, and decisive", Kastor said.

"And everything we're hearing about this (debt ceiling) incident is the reverse. The question is, which of these images will be in place a year from now?"

Obama was being pegged as a short-term loser in the battle over the debt, while the longer outlook remained cloudy.

"Things like this can overwhelm a presidency," Kastor said.

"It's not even so much that it's a crisis, but it's an incident in which a president doesn't seem to be sufficiently in charge."

The New York Times berated the president for failing to get lawmakers to include increased tax revenues as part of a balanced deal.

Surrender after surrender

The paper's Monday editorial blasted him for "a nearly complete capitulation to the hostage-taking demands of Republican extremists", while a column authored by Nobel prize-winning economist Paul Krugman took issue with Obama's frequent "folding in the face of (Republican) threats".

"He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling," Krugman wrote.

Carney said Obama has shown "enormous leadership through this process", but after the Times broadside the White House insisted Obama had not been "diminished" in the fiasco as the newspaper claimed.

Kastor stressed it was unclear how damaging the crisis would be on Obama a full 15 months before Americans go to the polls.

"It's a long time before the election, and a lot is going to turn on the economy," Kastor said.

He noted that president Bill Clinton was in a similar position in the 1990s; he lost the House to Republicans and endured a government shutdown, only to win re-election.

Comments
  • Monsterz - 2011-08-02 11:25

    Its time for a TEA PARTYYY\\\

  • TRiP - 2011-08-02 11:48

    Truth is, America never took the real price of war into account. Their enemies have ridden them out, now they're broke.... I guess you could say they've been played. Sadly.

      Paco7 - 2011-08-02 12:52

      why sadly,they deserve all the sh*t they started and more...America is made up of 40% drug addicts,40% alcoholics,10% arm dealers and 10% whores

  • spacecowboy - 2011-08-02 11:56

    WINNING!

  • JHF - 2011-08-02 12:43

    Being the president of a greedy country cannot be easy. He has to fix all past decitions of Bush. For the Americans to expect him to fix their economy is a but much to ask for. Start producing smaller engines and use less oil. Fix you financial system and stop injecting the rescue package ($800B) back to where the problems started - Wallstreet. Stop agricultural subsidies as it only makes the rest of the world poor and creates more debt for yourself.....and so the list goes on.

  • Patrick - 2011-08-02 12:54

    More retarded crap from a retarded news24. The people are PISSED OFF!~!!! You idiots. Why the hell do you get this crap onto your site is beyond me. I think you hire someone at alcoholics anonymous to trawl the net for this claptrap you call reportage.

      Otello - 2011-08-02 13:04

      Social spending, and we are going the very same route. Rewarding people for their irresponsible actions.

  • Otello - 2011-08-02 13:03

    Osama Bin Laden lost the battle and won the war. A bankrupt USA. Hook,line and sinker.

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