THIS has been a bleak moment for America, and the darkest of Barack Obama’s presidency so far. On Friday August 5th Standard & Poor’s downgraded the country’s credit rating from AAA to AA+. The next day American troops in Afghanistan suffered their biggest single loss in the decade-long war when the downing of a helicopter killed 30 Americans (and eight Afghans), including 22 elite Navy SEALs, the unit that killed Osama bin Laden in Pakistan in May. Financial markets dived on their opening on Monday August 8th, at the start of a week of gyrations. With 14m Americans unemployed, little wonder that an average of polls monitored by RealClearPolitics, a website, shows that more than two out of three Americans now believe that the country is on the wrong track.
On August 8th Mr Obama addressed the nation from the State Dining Room of the White House in a bid to soothe nerves and markets. He gave a terse speech that repeated many of the themes he has been replaying like a gramophone record throughout the summer, and especially during his bruising fight with the Republicans in Congress over raising the debt ceiling. Although America had a long-term deficit problem, its problems were “eminently solvable” provided Washington found the political will to add tax reform and some “modest” savings in health care to the cuts it had already agreed on in domestic and defence spending. He implored Congress to protect jobs by extending the payroll tax cut and unemployment benefit when it returned from its summer recess. As for the downgrade, no matter what “some agency” might say, this was the United States of America: “We’ve always been and always will be a triple-A country.”From the moment of S&P’s decision (the agency has also downgraded the mortgage giants Fannie Mae and Freddie Mac), the government has worked hard to discredit its analysis. But whatever the flaws in its financial logic, S&P’s political analysis is spot on. In light of the brinkmanship of the recent months, it argues, America’s governance and policymaking are becoming “less stable, less effective and less predictable”. The agency says that its decision was based not only on the modesty of the savings contained in the final deal hammered out by Republicans and Democrats but also on the way the agreement was reached. The gap between the parties had become “extraordinarily difficult” to bridge, and “the statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.”As if to prove the firm’s point, America’s politicians responded by turning instantly to the urgent business of blaming the other side for what had gone wrong. On last weekend’s Sunday talk shows (Democratic) Senator John Kerry told “Meet the Press”, and David Axelrod, a former adviser to Mr Obama, told “Face the Nation”, that this was a “tea-party downgrade”. The Republicans returned the favour by calling it “Obama’s downgrade”. Even Senator John McCain, who had criticised fellow Republicans in the House as “hobbits” during their grandstanding on the debt ceiling, pinned the ultimate blame on the president: instead of producing a plan of his own, Mr Obama had insisted on “leading from behind”.
While the politicians apportion blame, voters are drawing their own conclusions. The day before the downgrade a poll for the New York Times found that a record 82% of Americans disapproved of how Congress was doing its job, the highest proportion since the Times started asking the question in 1977. More than four out of five thought that the debt-ceiling debate had more to do with the parties seeking political advantage than with doing what was right for the country. The Republicans fared worst: a full 72% disapproved of their handling of the negotiations, compared with 66% who disapproved of the Democrats and 47% who disapproved of Mr Obama’s handling of the negotiation.
These numbers have not dented the pride most Republicans say they feel in having got at least some of the cuts they wanted from the fight over the debt ceiling, a fight long in the planning. According to the Washington Post, Eric Cantor, the majority leader in the House, was as early as January imploring the Republican freshmen swept into office by last November’s mid-terms to “look at a potential increase in the debt limit as a leverage moment when the White House and President Obama will have to deal with us.”
Republican presidential candidates heading to Iowa for the Ames straw poll due to take place on August 13th showed no contrition either. Most had opposed the final compromise sealed by their colleagues in Congress. The two who are themselves members of the House—Michele Bachmann and Ron Paul—voted against it. Before the vote, Mrs Bachmann dismissed Mr Obama’s warnings of dire consequences if the ceiling was not raised as a “scare tactic”. After it, she demanded the resignation of Mr Obama’s treasury secretary, Tim Geithner (who has said he is staying on).
So the dire consequences which Mr Obama warned of have now occurred. That ought to increase the pressure on Congress’s new joint committee on deficit reduction, comprising a dozen members with six from each party, to do its job. Created as part of the debt-ceiling agreement, this “super-committee” is supposed by November 23rd to propose ways to cut the federal budget deficit by $1.5 trillion over the next ten years. It would have been a sign of seriousness if the parties’ leaders had put members of the “gang of six” senators who have been trying to formulate a bipartisan approach to deficit reduction on the committee. But none of them were picked. On the Republican side, all six nominees have signed the pledge devised by Americans for Tax Reform, a pressure group, forswearing all tax increases.
There are other signs that the ideological gap that stymied Mr Obama’s recent efforts to strike a “grand bargain” with John Boehner, the House’s Republican speaker will persist. Mr Boehner’s immediate response to Mr Obama’s address was to reiterate that “raising taxes is simply the wrong approach.” Nancy Pelosi, the leader of the House Democrats, promised to “hold true to our values of protecting and strengthening Medicare, Medicaid and Social Security”. When Congress reconvenes after a summer of recrimination, it is liable to be no less divided than before. The joint committee will not have an easy time.from the print edition | United States