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Konrad Yakabuski

U.S. credit downgrade drives bickering Congress further apart Add to ...

Major bill-signing ceremonies are ideally unifying moments in U.S. politics. Members of both parties gather at an evocative site and hover proudly over the President to bear witness to a common achievement.

But when Barack Obama autographed last week’s debt-ceiling legislation, ending perhaps the most bitter political battle of his turbulent mandate, he did so alone, in the protective confines of the Oval Office.

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The symbolism of that solitary gesture may also be a harbinger.

The political discord that contributed to the loss of the U.S. government’s pristine credit rating is not abating. Each party is heaping blame for the humbling downgrade on its rival. And the vitriol only threatens to get worse in the run-up to a potentially epochal election in 2012.

Instead of uniting Democrats and Republicans to take another stab at deficit reduction in the spirit of compromise, the move by Standard & Poor’s to cut the AAA credit rating to AA-plus is driving the parties further apart.

In justifying its decision to remove the United States from its list of risk-free borrowers, S&P fingered the “political brinksmanship” that is making U.S. governance “less stable, effective and predictable.”

If that was meant to be a wake-up call, the American political class did not take it that way.

The White House ridiculed the agency’s decision – with one senior official attacking S&P’s “amateurism” – while Obama re-election strategist David Axelrod took a swipe at Republicans for the “Tea Party downgrade.”

House of Representatives Speaker John Boehner reacted to the rating cut by insisting that “decades of reckless spending cannot be reversed immediately, when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground.”

It was an odd declaration, considering Mr. Boehner is the second most powerful politician in the U.S. capital. No legislation can be put to a vote in the lower chamber without his assent. And the main reason Congress failed to pass a deficit-reduction deal large enough to satisfy S&P was that the Republican House majority blocked any tax increases.

All of the candidates for the 2012 GOP presidential nomination also have drawn a “no-new-taxes” line in the sand. Mitt Romney, the front-runner and arguably most moderate contender, had nothing constructive to say about the downgrade, calling America’s creditworthiness “the latest casualty in President Obama’s failed record of leadership on the economy.”

Mr. Obama will indeed suffer more than any other politician for S&P’s action. While voters give him higher marks than Mr. Boehner for his handling of the debt-ceiling standoff, such comparisons are irrelevant. Mr. Obama will not be running against the Speaker in 2012 and Americans know where the buck stops.

Mr. Obama sought throughout the debt-ceiling debate to chart a centrist course, seeking a “grand bargain” of tax increases and reforms to social programs to reduce the deficit by $4-trillion (U.S.) over 10 years.

But in the end, his unsuccessful approach only alienated core Democrats, who complained he did not fight hard enough for tax increases. A scathing essay in Sunday’s New York Times asked: “What happened to Obama’s passion?”

The President has not fared better with independent voters – barely a third of them approve of the job he is doing.

But former Illinois comptroller Daniel Hynes, who lost the state’s 2004 Democratic Senate nomination to Mr. Obama, insisted the President’s centrist tack would work to his benefit in 2012.

“While some might question who came out on top politically now, I think the election of 2012 will be a great opportunity to have a national debate about the best approach to continuing down the path of deficit reduction,” Mr. Hynes said in an interview. “The President has the right message and the right approach.”

Mr. Hynes also shot back at S&P: “I’m not sure the rating agencies should be going so far as to critique how long it took [to reach a deal]and what level of disagreement there is in Congress if, in the end, they came together with a bipartisan package that takes dramatic steps to reduce the deficit.”

Mr. Obama remained out of public view at Camp David on the weekend. But his press secretary put out a statement that amounted to an “I told you so” rebuttal deflecting criticism for the downgrade.

“The President repeatedly called for substantial deficit reduction through both long-term entitlement changes and revenues through tax reform,” Jay Carney said. “The President pushed for a grand bargain.”

A bipartisan congressional panel must still decide on how to come up with $1.5-trillion of the overall $2.4-trillion deficit-reduction goal set in last week’s deal. But the downgrade has done nothing to narrow the political divide.

According to Gallup, almost half of Americans (46 per cent) disapprove of the deal, while only 39 per cent support it. Though their anti-tax, anti-government stands drove the debate, fully 68 per cent of Tea Party supporters are against the agreement struck by Mr. Boehner.

“We need to manage spending, increase taxes and get through it,” countered Lee West, an agricultural scientist passing through Chicago’s busy O’Hare airport. “Come on, people. It’s not that complicated.”

But Mr. West was ambivalent about S&P’s move, calling the downgrade “a red herring” and adding he did not “see any other country stepping up to the plate as a safer place to put money.”

As for the political bickering the agency singled out as the partial justification for the rating cut, Mr. West smiled, shook his head and offered: “I’ve read enough history to know it’s always been bad.”

 

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