Now that the Debt Ceiling is Raised, What Next?
Like many in Washington, we’ve been focused on the debt ceiling debate for the past several weeks. The evolution of public awareness and opinion on that issue was fascinating to watch and the public opinion and electoral repercussions will continue to evolve over the coming weeks and months.
But, the debt ceiling issue has been resolved until after the 2012 elections. So let’s refocus a bit on the three key stories that will matter most over the next few months.
Jobs, Jobs, Jobs
One thing the debt ceiling argument did well was take the focus off of the long-term challenges facing the economy.
With the threat, however credible, of an immediate melt-down if the ceiling were not raised, there was not much attention dedicated to the creeping indicators that the economy certainly isn’t improving and may even be weakening.
Now that the debt ceiling debate is done for the moment, we’ll see a renewed focus on jobs and the economy. Just to recap, after 32 months in office and implementation of many of his key proposals Obama has achieved the following:
- 9.2% unemployment,
- GDP growth of just 1.3% in the second quarter of 2011 (which may well be revised down significantly, as Q1 growth was) following 0.4% in the first quarter.
- Continued and perhaps growing weakness in the housing sector,
- Troubling signs in consumer spending, and
- New worries about manufacturing.
No wonder then that across multiple polls released in July majorities of Americans still consider the economy and jobs to be the number one issue facing the country.
Now Obama and the Democrats have announced a “renewed focus on jobs.”
But we wonder what they plan to do. Their signature remedy of spending a bunch of money didn’t work the first time and won’t pass a second time. They seem fundamentally incapable of seeing that things like the health care bill, uncertainty over EPA regulations, uncertainty over financial regulations, and the overall looming threat of government over-reach is a big reason the economy is stalled.
So if they can’t do what they want and won’t admit they need to do what they should, perhaps what we should really expect is a “renewed focus on blaming George W. Bush, Republicans, and anyone else we can find for the fact that there aren’t more jobs.”
More Budget Battles
When Congress comes back to town in September, we’ll be right back into a fight over the budget.
While the debt ceiling debate did impose spending caps and set a roadmap for some cuts, it didn’t pass a budget.
One federal agency (the FAA) is now partially shut-down due to a failure to pass funding and the rest of the federal budget is due out this fall to avoid either another continuing resolution fight or a shutdown.
With many voters likely to be disappointed by the relative magnitude of the cuts in the debt ceiling deal and the likely failure to pass a long-term fix (like a Balanced Budget Amendment)—remember, according to a CNN poll from the middle of last month, 60% of Americans feel a BBA is going to be required to fix the problem long term—Republicans will be continuing the spending fight throughout budget season.
Fear and More Fear on the Campaign Trail
The general rule of thumb and of history is that the incumbent President and his Party own the economy. For more on this, see the thorough review that political scientist John Sides put together here and in the posts linked to that one.
While the President will surely continue the strategy he began in his speech earlier this week and blame the problems facing the country on George W. Bush, Republicans, and anyone else who wanders across his path; history suggests that’s not going to help him much.
So as Democrats head home to talk to their constituents, don’t expect to hear much about the “accomplishments” of the past three years. Don’t expect to hear much about plans for the future either.
Instead, we’ll hear a lot about the Paul Ryan Medicare proposal. That’s right, Democrats are unlikely to open their mouths without talking about a single proposal from a bill that only ever passed one chamber of Congress and which is not a part of any current plan or proposal being advanced anywhere in Washington.
Because the only chance Obama and the Democrats really have in 2012, absent an economic miracle, is to somehow convince the average voter—and the average Senior voter in particular—that the only thing worse than their systematic and categorical failure to actually solve the biggest problems facing the country is what Republicans might do if they control both Congress and the White House.