In the wake of the S&P downgrade, Republicans are slamming President Obama for their own malfeasance. Obama is also being criticized from the left for not standing up to the tea party-led GOP, but it’s hard to calculate just how that would have worked out. In the game of chicken forced by Republicans, the possibility of legitimate compromise seemed off the table. That left default or what we got as the two possible outcomes, and the tea party made it clear that default was acceptable.
Tea party Republicans make up a minority of the House majority, so they did not come by their power legitimately. What they did was create an aura of fear around their movement, threatening primary challenges to incumbent Republicans if they didn’t toe the tea party line. The no-tax pledge authored by Grover Norquist has trumped the Oath of Office each representative swears to, which makes it impossible for Republicans to govern responsibly.
The House leadership bears the blame for this. John Boehner should have repudiated the tea party for their extremism while he was minority leader, but he probably saw them as a means to gain the speakership. Even then it wasn’t too late. When he saw the direction tea party Republicans were taking the party, he could have put the brakes on.
He didn’t, and here we are. S&P, whose own credibility is questionable (says Paul Krugman in his NY Times column today as he wrote about S&P’s two trillion dollar math error), didn’t say we didn’t cut enough to reduce the debt — they said we didn’t do enough. It does not take a genius to understand that you attack debt from two directions if possible — spending cuts and revenue increases. It was possible to do both, but the Republicans forced us to do just one.
The markets are taking no small comfort in the fact that two other ratings agencies did not lower our rating. After a week of declines anticipating the lowered rating, the market today is plunging again, the Dow Jones down over 300 as I write this. What to do? Boehner could call the House back into session and craft a bill that would end a few wasteful subsidies and raise taxes on those making a million and above. Then Harry Reid could call the Senate back into session and get it passed. It might not get S&P to change its mind, and it might not reverse the market’s decline right away, but it would increase revenue, and it would reduce the debt. This would paint a healthier picture of the US economy overall and demonstrate to the world that we’re serious about managing our budget.
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