Having no budget is bad enough, but there could be so much worse to come

A stalemate between Democrats and Republicans spells trouble further down the line


As the self-appointed exemplar of all that is best about democracy, Washington is looking rather battered. Thanks to the inexorable animosity between Republicans and Democrats, and to electoral arithmetic that gave one house of Congress to each, the US government has no budget. Essential services will continue – the Army is still on duty, welfare is still being paid – but discretionary spending is suspended. Everything from the Smithsonian to Yosemite National Park is closed, and nearly a million employees are on leave.

The economic impact is not exactly negligible. All those unpaid wages and lost fees mount up to a drag of perhaps $300m per day – sufficient to make a discernible dent in GDP over a period of weeks. In the short term, though, the shutdown is bearable enough for an economy the size of the US. But if the immediate effect is no catastrophe, its cause most certainly is.

The Republican-dominated House of Representatives refused to pass the budget without amendments gutting Barack Obama’s signal legislative achievement, the Affordable Care Act. But the Democratic Senate then rejected the bastardised bill, several times, in return. Quite right. Not only is the US healthcare system in desperate need of reform, “Obamacare” has already been passed and the President won last year’s election on the strength of it.

The result, however, is a stalemate. When Alexis de Tocqueville wrote his seminal Democracy in America in the 1830s, his primary concern was that the fledgling republic would prove too democratic, that it would merely substitute a tyranny of the majority for that of the elite. But the French philosopher’s warning has been turned on its head. What we are seeing now is the tyranny of a minority of Tea Party extremists more appalled at the notion of a bigger government than at either the reality of millions of people unable to afford to be ill or the spectacle of a US President held to ransom. And though their strategy to scupper Obamacare stood no chance of success, the Republican leadership was bullied into pursuing it at risk of charges of betrayal.

The question now is, who will blink first? It must be the Republicans. Not only because the Democrats are in the electorally mandated right. Also because the GOP is, contrary to Tea Partiers’ nonsensical expectations, bearing the brunt of the blame. Even so, a solution may take time, as the Republicans struggle to escape the corner into which they have backed themselves. In the meantime, the political system they profess to cherish is discredited and the country they profess to love is damaged.

Worse still, the budget debacle is no one-off. Within weeks, Congress must agree to raise the “ceiling” on government borrowing again. If it does not, the impact will not just be closed museums and unpaid public sector staff. Indeed, if the bonds issued by the world’s biggest debtor government are suddenly in question, the effects will be felt everywhere in rising interest rates and a return of the uncertainty that caused such havoc during the credit crunch. Given such alarming global consequences, it can only be hoped that America’s politicians would not take such a risk. But after this week’s shenanigans, we cannot be sure.

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