After weeks of protracted, often difficult negotiations the debt ceiling deal is done.
Whatever the economic impact of the deal — Moody’s, it should be noted, announced shortly after the deal became law that they too were not happy but that they would not be lifting America’s triple-A bond rating as yet — the political ramifications are considerable.
No one got everything they wanted — least of all President Barack Obama. The legislative package that passed the Senate Tuesday nonetheless represents a sea change in the way Washington handles the people’s business, proving once and for all that deficit reduction can be accomplished through spending cuts alone and that the demands for new revenue are a political calculation rather than an economic one.
As is usually the case in such events, there are both winners and losers — including the country, which is both winner and loser because, though the crisis is averted for the moment, the weight of the national debt still hangs over the nation like a falling anvil in a Road Runner cartoon.
The biggest loser is probably President Barack Obama, whose leadership during the crisis has been non-existent.
Obama began by hectoring the Republicans in Congress with an initial demand that the increase in the debt limit be clean, unencumbered by additional requirements.
That idea went nowhere, and not just the Republicans in Congress opposed it. When it was put to a vote it failed on a bipartisan basis.
The president also wanted any deal to include so-called revenue enhancements, which is Washington-speak for tax increases. Again he failed to get what he wanted, putting his hopes for a tax hike on the report of the congressional “super committee” that will, by Thanksgiving, have to issue a set of recommendations on how best to achieve the remainder of the deficit reduction the plan he signed into law Tuesday calls for.
Politically, the deal puts him in a bad light with the left wing of his own party, which has been fairly brutal in its criticisms of the deal.
An unnamed senior Senate Democratic aide was quoted by the Washington Post as saying, “When you look at the merging details, spending cuts and triggers with no revenue, the president got rolled.”