he standoff over the debt ceiling has finally come to an end. The House and Senate passed the compromise reached at the eleventh hour, and President Barack Obama signed it into law, just in time to allow Treasury Secretary Tim Geithner to sell bonds to fund continuing deficit spending. The debate over spending and taxation will now focus on a bipartisan Congressional commission and a presidential order that will raise the debt ceiling once more before the next election.
Who won, and who lost? Did anyone win? If we gauge winners and losers by the reaction from politicians and activists across the political spectrum, no one was satisfied with the deal reached between Democratic and Republican leaders in Congress and President Obama. Though it is arguably true that few actually advanced their agenda much in the deal, that doesn't mean everyone came out of this deal equally worse off. Indeed, despite some dissatisfied rumblings from within the Tea Party, one lesson is clear: They succeeded in transforming Washington.
Just as Rome wasn't built in a day, it will take much more than one vote or one budget to build the kind of limited, fiscally responsible America that Tea Partiers desire.
The president had the most to lose, and he lost the most as a result. Obama and his team began stoking the controversy over the debt ceiling limit as far back as January, when Republicans officially took control of the House. Geithner said that a Republican failure to raise the debt ceiling would be "deeply irresponsible" and would cause "catastrophic damage to the economy." White House economic adviser Austan Goolsbee warned Republicans not to "play chicken" with the debt ceiling.
However, despite knowing that House Speaker John Boehner would not act to raise the ceiling without a deficit-reduction plan, Obama never published a plan of his own in the six months since. Just weeks after these warnings, Obama sent a budget request to Congress that increased the rate of deficit spending, a plan that the Senate unanimously rejected in May. In April, Obama said that he would deliver a plan for deficit reduction as an amendment to his previous budget, and even gave a national speech on the topic. Three months after that, Obama still had yet to publish his plan, or any plan that addressed the crisis that his own administration hyped.
Crises create opportunities for leadership, and the White House had a six-month headstart on this one. Obama refused to lead at all. That isn't the only reason why Obama lost the most in this standoff, however. While refusing to put forward a specific plan, Obama insisted on one specific component in any eventual compromise — new tax revenue. He didn't calculate the resistance to tax hikes in the new Republican House, not even after Senate Majority Leader Harry Reid read the writing on the wall and surrendered on the point. Not only did Obama keep insisting on tax hikes long after Reid gave them up, Obama continued to insist on tax hikes after signing the bill.
That is a cri de coeur, not a victory cry.
Of course, the Tea Party isn't exactly crowing this week either. But they should be. Most of them point to the paltry reductions in spending, and the lengthy timeframe in which they occur, as evidence of a flim-flam. The deal will cut more than $2.5 trillion over a decade, which works out to $250 billion a year on average. Most of that savings gets put off until the later years — and that only happens if future Congresses don't reverse course. Most of the cuts will come from the bipartisan ad hoc committee mandated in the compromise, and Tea Party activists are understandably leery of commissions and the potential for mischief, particularly the risk for sneaking tax hikes into the mix later.
All of these are rational concerns, but they ignore some larger realities. Reid gave up on tax hikes, not because he got tired of talking about them, but because there isn't any appetite for tax hikes on Capitol Hill — thanks to the power and influence of the Tea Party. The cuts mandated in this compromise might be paltry, especially at first, but they represent a step in the right direction. For the first time in perhaps decades, Congress will approach budget shortfalls by looking at where spending can actually be reduced rather than where revenue can be raised.
That is a remarkable paradigm shift, and one worthy of celebration after a decade of exploding deficits from Congresses controlled by both parties. Without the Tea Party, that paradigm shift would never have occurred. Indeed, without the Tea Party and their victorious candidates, the debt-ceiling increase would have been a routine vote noted only by a few bloggers and the back pages of most newspapers.
Understandably, most Tea Party activists see this as business as usual and not the kind of transformative, instant change they envisioned. But just as Rome wasn't built in a day, it will take much more than one vote or one budget to build the kind of limited, fiscally responsible America that these activists desire. The expansion of the federal government has gone on for decades, and it will take many battles and victories, small and large, to reverse it. This is a long journey, and the Tea Party helped push the nation into taking a step in the right direction. They need to take this win for what it is, rather than lose heart over not having won the entire war in a single skirmish.
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