There’s “no way to spin” the deal struck on Sunday to raise the US debt ceiling, says Eugene Robinson in The Washington Post. The Democrats lost and the Grand Old Party won. Republicans insisted on budget cuts only, “with not a cent of new revenue” – and that is what they got. The White House agreed to $900bn in budget cuts over ten years, exempting Medicaid and other programmes for the poor, and a 12-member bipartisan ‘super-committee’ of Congress has been created to come up with a further $1.5trn in deficit reduction over ten years.
At first glance the deal does suggest a Republican win, and this is the consensus in the US press, but in fact it could “save Barack Obama’s presidency”, says Tim Stanley in The Daily Telegraph. The Republicans adopted a high-risk strategy and as a result have created a “new narrative” in American politics. In the public’s mind, Obama has been transformed from a liberal into a moderate, and the Republicans from “free-market rationalists into economic vandals”. Under pressure from the Tea Party Republicans, House Speaker John Boehner “pushed the country to the brink of defaulting”. In doing so “the party of business came close to ruining America’s reputation as a place to do business”. Meanwhile, Obama “sat back and played the defender of the federal government’s popular entitlement programmes” while admitting that “modest adjustments” needed to be made to ensure they were still around for future generations. If the Republican medicine works, Obama’s administration will claim that it made it happen, “all without bouncing grandma’s social security cheque”.
What matters is not political advantage in the run up to the 2012 presidential elections, but how these spending cuts will affect our country, says Joe Nocera in The New York Times. America’s real crisis is unemployment, and this deal is “guaranteed to make it worse” as the spending cuts shrink growth and increase the chances of a ‘double dip’. It’s what happened in 1937 when Franklin Roosevelt tried to rein in federal spending. It’s a “disaster”, agrees Paul Krugman, also in The New York Times. It’s bad for the economy and it’s bad for America’s reputation. Obama surrendered over the extension of the Bush tax cuts; he surrendered in the spring when the Republicans threatened to close down the government; and he has now surrendered over the debt ceiling. This demonstration that “raw extortion” works takes America “a long way down the road to banana-republic status”. What Republicans have got away with “calls our whole system of government into question”.
To focus on the “political muscle” of the Tea Party is to ignore the “tectonic political shift that’s taken place”, says Toby Young in The Daily Telegraph. As elections over the past two years have shown, “citizens in nearly all the world’s most developed countries simply aren’t prepared to tolerate the degree of borrowing required to sustain generous welfare programmes”. Sunday’s deal represents the moment when Obama acknowledged what the left still hasn’t: that “to maintain the levels of public spending required to fund ambitious welfare programmes is political suicide”.