The agreement brings to an end a self-created crisis that has consumed Washington, rattled Wall Street, and shaken confidence in the American political system at home and abroad. The deal could clear Congress as soon as Monday night — barely 24 hours before Treasury officials have said they could begin running short of cash to pay the nation’s bills.
Passage of the agreement, however, remained far from certain in the House, where skeptical Republicans were just beginning to digest the details.
“This process has been messy. It’s taken far too long,” President Obama said in brief remarks at the White House. “Nevertheless, ultimately, the leaders of both parties have found their way toward compromise, and I want to thank them for that.”
Obama said the agreement “will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.”
With the broad strokes of the deal seemingly in place, which parties and politicians came out winners from the long and fractious negotiations? Chris Cillizza concluded:
The debt ceiling fight is over. The White House and congressional leaders have settled on a deal to raise the nation’s debt ceiling, enact immediate spending cuts and, our favorite part, create a super-commission designed to trim the federal budget further by the end of the year. The political stakes for this fight were massive — and it produced a number of winners and losers. Our take on the best and the worst is below.
Mitch McConnell: The Kentucky Republican was like the Mariano Rivera of the debt deal. He waited until the game was in its final moments, came onto the field and helped close things down (in a good way). McConnell was also a voice of reason and frankness for Republicans, making clear that default would be a huge political loser for the party. In the end, he got a deal the way he wanted one — with him at the center of negotiations.
Tea party: There were major questions coming into the 112th Congress about who would blink first — the largely establishment-aligned leaders of the new Republican House majority or the tea-party-aligned freshman members. We got our answer to that question late Thursday as House Speaker John Boehner was forced not only to postpone his compromise bill but ultimately to add conservative sweeteners to get the 217 votes he needed. (He got 218.) The tea party — inside and outside Congress — will almost certainly be emboldened by the result of this fight.
President Obama: The president needed a deal of some sort to prove that he was capable of making the government work — even if it took until the eleventh (and a half) hour to strike the compromise. Liberals are likely to be deeply unhappy about the nature of the deal, which includes no increases in taxes or revenue. But remember that Obama’s target constituency in 2012 is not his base but rather independent and moderate voters. And those fence-sitters love compromise in almost any form.
Ezra Klein profiled the winners and losers from a policy perspective:
There have been a lot of lists ranking the political winners and losers in the debt deal (Chris Cillizza has a good one here). But what about the winners and losers in the policy? Turns out there are plenty of those, as well. In particular, there are plenty of losers. So let’s start with them.
The Pentagon: A year ago, defense spending was supposed to be sacrosanct. We even had a term of art for how to cut spending without touching defense: “non-defense discretionary spending.” But no one takes it on the chin the way the Pentagon does in this deal. They’re getting $350 billion in immediate cuts and then, if the trigger goes off, another $600 billion in cuts over the next 10 years. They’ve also been jammed into a structurally dangerous position: With taxes off the table, defense cuts have become the concession Republicans can give Democrats in these deals. If that dynamic holds over the next few years, this may not be the last time the Pentagon gets the knife.
The unemployed: In the 2010 tax deal, Democrats managed to expand and extend unemployment benefits through 2011. This deal lets them expire at the end of the year. That means that barring some later rescue, $60 billion in support for the jobless will evaporate Dec. 31, 2011. That’s not only a huge blow to the uninsured themselves, but it removes some much-needed economic support from a teetering economy. Speaking of which ...
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