Friday, 29 July 2011

Chuck Dalldorf: The political battle over the US national debt limit

"On this side of the Atlantic, we are stuck in the grip of a self-created political and possibly economic crisis. With only days to go before the United States defaults on loans and forces a large economic disaster, which may have global implications.

This political battle is a schizophrenic series of events in the context of a terrible, anemic economy with high unemployment, wrapped up in the beginnings of a huge political campaign for the 2012 elections. President Barack Obama is running for re-election in the fall of 2012. He is not alone and all 435 members of the US House of Representatives and one third of US Senators face re-election with the President in 2012.

The U.S. Constitution authorizes Congress to manage federal spending and borrowing. Congress controls what the U.S. Treasury can borrow through the establishment of the debt limit, which currently is $14.29 trillion. As the US has struggled through the global economic recession and the operations of two wars, expenditures of the federal budget have not matched tax revenue leaving the U.S. national government no alternative but to borrow money.

Historically, Congress has used the issue of extending or modifying the debt ceiling as another tool to grandstand on federal budget related issues, or programs supported or opposed by the political party opposite. In the current battle over the extension of the debt ceiling, the President is a Democrat, the Senate is controlled by the Democratic Party and the House of Representatives is controlled by the Republican Party.

Generally speaking, Democrats want the debt ceiling extended to help fund needed programs as well as paying for debt the US has related to the economic downturn and fighting two, long and on-going wars. Republicans believe in smaller government and want to see government spending reined in. (Though it is interesting Republican’s want federal spending reduced outside war funding, which has been the single largest expenditure driving the US economy into debt long before the massive global economic recession. But I digress…)

As the US economy began plunging in 2008, both US Presidents Bush and Obama expended huge amounts of federal money to shore things up. The results of those emergency efforts were mixed, but mostly Americans feel there was little choice in those efforts.

One of the largest expenditures, outside the wars, was the effort the Obama administration pursued in creating a federal stimulus effort to try to even out and slowly grow the economy. I think the stimulus worked some, but did not place enough federal money in the right places and to the right people.

The economic struggle at hand is a very real one. We are desperately fighting a double dip recession and we have clearly not created enough jobs. A jobless recovery cannot create growth and confidence.

America’s political culture has changed and it has changed for the worse. We seem to no longer believe some issues are more important to resolve for all Americans then seeing those issues as ways to make political points. This is now true in national, state and local governments throughout the country.

The political crisis of the extension of the national debt limit has become a self-inflicted slow motion train wreck for the economy and continued alienation of Americans from political participation and faith in the leadership of our nation. Each party sees a jam opportunity but everyone is flirting with a possible massive economic meltdown that would affect the US and global economies.

We are in a race to the bottom right now and there will be enough blame to go around. The Tea Party leaning Republicans seem to be re-enacting a failed a battle strategy from the Vietnam War where they seem to be saying they are ready to “destroy the village in order to save it.” Traditional Republicans, including House Speaker John Boehner, look to find ways to win points for GOP house members and to cause damage to the President.

President Obama and Democrats in the Senate and House have not used enough opportunities to focus on the creation of jobs. Democrats are also playing political theater to demonstrate how Republicans are hurting core constituents in the budget process and the impacts to them in proposals to cut costs to gain acceptance to solve the debt ceiling crisis.

Daily polling from a number of sources show there is continuing damage to both parties as well as the President. We continue to foster a political culture of conflict over solutions. We no longer seem able to find a shared national interest where both parties can work together to create jobs and allow families to recover from this damaging, ongoing recession. Without this focus and joint commitment to resolve what ails Americans, both major parties continue to alienate voters and make party politics irrelevant".
This week's guest blog was from our good friend Chuck Dalldorf, Public and Political Affairs Consultant and Part-time Lecturer at Sacramento State.

Back in 2009 Chuck authored a blog for the CSPP entitled West of the West Wing. You should check it out.

(Image courtesy of the BBC)

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