Congress's new brinkmanship: Better or worse than politics as usual?

After a battle among House GOP conservatives, Republicans on April 7 agreed to a lesser $38.5 billion cut. Speaker John Boehner persuaded caucus members that they had won a point of principle and would only lose public support if it came to a shutdown, just as they had after standoffs with President Bill Clinton in 1995.

But a subsequent analysis by the Congressional Budget Office found that the budget deal would whittle spending by only $352 million. Critics, blaming Mr. Boehner, dubbed the outcome "smoke and mirrors." House leaders reassured angry conservatives that this was merely a first step toward changing the culture of Washington. The point of maximum leverage was yet to come: Mr. Obama's request to raise the US debt limit.

Debt-limit Armageddon

Congress usually deals with raising the national debt limit by criticizing the president and then passing a bill with as little fanfare as possible. It would be inconceivable for any Congress to jeopardize the full faith and credit of the US, said officials from both Republican and Democratic administrations.

In fact, Congress had raised the national debt ceiling 78 times since 1960, 49 times at the request of Republican presidents and 30 at the behest of Democrats.

But many House GOP freshmen had pledged to oppose raising the $14.3 trillion national debt limit by even a dime. Boehner declared on May 9 that no increase would clear the House unless the legislation included spending cuts equal to the size of the debt-limit increase – and no tax hikes. Then, he stuck to it.

The House tied a higher debt ceiling to a "cut, cap, and balance" bill, which would require Congress to cut current spending, cap future spending, and pass a balanced budget amendment to the US Constitution. Senate majority leader Harry Reid (D) of Nevada dubbed the bill "weak and senseless … perhaps the worst legislation in the history of this country." Democrats said any big plan to shrink debt and deficits should include tax hikes and shared sacrifice. Moreover, they said, the hike in the debt limit was for spending that Congress had already authorized, and Congress had an obligation to cover its checks.

With the US government on the brink of default, Congress on Aug. 2 approved a debt-limit hike that met Boehner's terms. But the drama alarmed world financial markets. On Aug. 5, the US lost its top-tier AAA credit rating, in part because of concern that Congress was not capable of getting the nation onto sound fiscal footing. Public approval plummeted, too.

"The Republicans have found a strategy that ... worked quite well for them – the politics of hostage-taking and blackmail," says Norman Ornstein, a senior fellow at the American Enterprise Institute, a Washington think tank. "The Republicans have made this a credible threat knowing that the Democrats – in part because they own the presidency – are going to blink."

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