Republicans' unavoidable defeat on shutdown and debt ceiling debate

Jeopardizing the economy or forfeiting to reduce the nation’s $16.7 trillion debt are not choices that come from a position of strength. Photo: Associated Press

NEW YORK, October 12, 2013 — Republican lawmakers are going to lose the standoff with the White House. They have already eased from their demand to delay Obamacare, and public opinion continues to hold the GOP responsible for the shutdown. President Obama is leveraging Republicans’ weak position to reopen the government and increase the debt ceiling without any conditions.


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The White House’s unwillingness to negotiate leaves Republicans with only unfavorable options. They could continue their stance on spending reductions, which could led to missing the debt ceiling deadline in five days or reopen the government and meet the deadline without plans to cut the budget. Jeopardizing the economy or forfeiting to reduce the nation’s $16.7 trillion debt are not choices that come from a position of strength, but from surrender.

House Speaker John Boehner’s offer of a six-week spending increase with the condition of having productive negotiations on more “pressing problems” with the bugdet only delays the inevitable: Obama will not make any concessions on spending. The president could have accepted Boehner’s terms to reopen the government, but he would rather wait until Republicans concede on reducing spending. Obama’s need for a complete victory over Republicans is putting America near the economic brink, but Americans are going to hold Republicans responsible.

An Associated Press-GfK survey released Wednesday indicates that 62 percent blame Republicans for the partial federal government shutdown. This is a substantial increased compared to polls last week.

On October 1-2, Fox News, CBS News, and YouGov conducted their own surveys, which reported 42, 44 and 50 percent respectively, believed that Republicans are responsible for the shutdown.


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The image of right wing lawmakers is taking a hit from Obama’s marketing of the shutdown as a Republican led effort that holds the economy hostage. Last week on WhiteHouse.gov, a one-week shutdown could cost the economy $10 billion. Since this is the second week of the shutdown the economy would have lost $20 billion, yet the basis of the calculation is not given on the website and economists have not confirmed the $10 billion figure.

IHS Global Insight, an economic research firm, estimates a $1.6 billion lost a week in economic output since 800,000 government workers on furlough are unable to provide services.

Economists stress that the shutdown is a minor issue compared to missing the debt ceiling deadline. Treasury Secretary Jack Lew has warned Congress this year that America will run out of funds unless the debt ceiling is raised. If Congress does not authorize more borrowing, America could default on its debt for the first time in history because it would run out of cash to pay its bills. In September Lew wrote to Boehner that after October 17, the Treasury will only have $30 billion of cash on hand, but the nation’s expenses can be “as high as $60 billion” on certain days.

Standard & Poor’s said it is unlikely to downgrade the U.S. from its AA+ rating due to the government shutdown, but would lower the nation’s sovereign credit to a selective default if the debt ceiling is not raised. 


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A default by the world’s largest economy would damage domestic and global markets. Business and consumer confidence would plummet. The Treasury reports that America’s borrowing costs would skyrocket and credit markets would freeze worldwide.

Since House Republicans are seen as the cause of the shutdown, they are under greater public pressure to end it along with raising the debt ceiling. Boehner would prefer to raise the ceiling with the condition of future budgetary cuts to reduce America’s dependency on borrowing.

Obama’s resistance to compromise means Boehner will have to reopen the government and raise the debt ceiling without any budgetary concessions to avoid a default. Republicans may save the U.S. economy from a crisis, but will have the difficult task of dealing with this political defeat as the 2014 mid-term elections approach.


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Tiffany Shorter

Tiffany provides foreign and economic analysis for Communities Digital News at The Washington Times. Her column called "EMEA Watch" focuses on events in Europe, the Middle East and Africa.

Tiffany is known for her political commentaries on U.S. issues which have been featured on BBC, CNN, BET, The Sean Hannity Show, CCTV AMERICA, Go Africa TV and Avui (Spain). She was also a regular guest on FOX News Live, a real-time online news program.

Tiffany recently completed her graduate studies at Columbia University's School of International and Public Affairs.

 

 

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