Monday, August 8, 2011

Debt Ceiling Crisis – A Change of Direction

The election of November 2010, which swept the most liberal House of Representatives, since the modern use of the term, out of power, brought in the most conservative – more conservative than the Gingrich’ House of 1994.

The debt ceiling crisis gave the House, and especially its Tea Party Movement minority, leverage to change the direction of the country’s fiscal policy. And, they used it.

The debt ceiling legislation puts the country on a different fiscal course of budget cutting and spending reduction. But, it also shifts the politics of the debate toward austerity. Liberal Democrats are playing defense. Their main strategy will be a class warfare argument of the need to tax the rich to add more revenue to save the government domestic entitlement programs put in place over decades and greatly expanded with the health care reform legislation.

During the August recess, they will, of course, complain about the congressional process. It’s irresponsible, too partisan, etc. And, they will endorse various aspects of budget cutting that appear to have little immediate effect, such as the balanced budget amendment.

But, the issue will not go away. The existence of various mechanisms in the debt ceiling legislation will place the issue front and center before the end of the year. And, of course, the 2012 election will be largely framed by the debate.

The most successful candidates will keep a focus on fiscal restraint while figuring out a strategy to invigorate the economy, improve the jobs picture and increase consumer confidence. Success in that balancing act will ultimately decide if Republicans sweep in 2012 or Democrats hold the line.

Channel 9’s debt ceiling coverage predicted passage of the compromise, even if not popular with Congress, because the political cost of not doing so was too high. The coverage also described the political meaning of the debate and its longer term political consequences.

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