Leaders agree debt ceiling deal -- but Obama's crisis isn't over

US president announces deal that will raise debt ceiling and slash spending by trillions.

Barack Obama has announced that Republican and Democratic leaders have reached an agreement on raising the US debt ceiling by $900bn.

A second increase of between $1.2tn and $1.5tn would be available subject to a second vote of disapproval by Congress. In return for this increase in the government's borrowing limit, Congress will commit to deep spending cuts, reducing the deficit by a roughly equivalent amount over the next decade. A special bipartisan committee will be set up to agree areas to be cut.

The deadline for raising the debt cap -- currently at $14.3tn -- is tomorrow. While this deal marks a significant breakthrough after days of deadlock, it has yet to be voted on. Even as Obama announced the measures at the White House, the Speaker in the House of Representatives, John Boehner, was trying to sell the proposal to House Republicans. The hardline elements of his party are likely to vote against the bill, meaning that Boehner must make the deal sound appealing to Republicans without alienating the Democrats whose vote will also be needed to pass it.

Obama said that while it was not the deal he wanted, it would make a "serious down payment" on the deficit, and would prevent another crisis in a year's time. This is something Democrats were keen to avoid in the run up to the 2012 election.

While attention is now focused on getting the bill through the House in the face of intransigent right-wingers, many Democrats are also unhappy at the level of fiscal tightening the bill will involve. Mirroring the debate in Europe, economists have argued that slashing government spending at a time of dismal growth will depress the economy further.

In addition to this concern about the content of the bill are serious worries about the political message this debacle sends to the Tea Party representatives who precipitated, or at least worsened, the crisis. Obama's refusal to use legal manoeuvring to side-step the crisis -- or even to invoke the possibility to strengthen his bargaining position -- could well empower those set on derailing his presidency and blindly pursuing their own small-state agenda. Paul Krugman, describing the deal as an "abject surrender" by the President, expresses the view of many on the left:

Make no mistake about it, what we're witnessing here is a catastrophe on multiple levels.

It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away. And the damage isn't over: there will be more choke points where Republicans can threaten to create a crisis unless the president surrenders, and they can now act with the confident expectation that he will.

In the long run, however, Democrats won't be the only losers. What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation's economic security, gets to dictate policy? And the answer is, maybe it can't.

Both houses will vote on the deal today.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Gerald Wiener
Show Hide image

From the Kindertransport to Dolly the Sheep: a New Statesman subscriber's story

Gerald Wiener's life has now been turned into a biography. 

In 1997, Gerald Wiener, an animal geneticist, gathered with a group of friends in Edinburgh to celebrate the cloning of Dolly the sheep by one of his former colleagues. He was a respected scientist, who had contributed to the developments in research which led to this ground-breaking development – and a New Statesman reader.

It could have been very different. Gerald was born Horst, on 25 April 1926, to a German Jewish family. Raised in Berlin by his mother, Luise, he grew up under the shadow of the Nazi regime. He was forced out of his school, and left increasingly alone as friends and family fled to the United States and Britain. After Kristallnacht, when Nazis looted and vandalised Jewish-owned businesses, his mother was desperate for her son to escape. She managed to get him included in the last-ditch organised rescue of German Jewish children, which became known as the Kindertransport. At twelve, Wiener arrived in the UK, alone.

For many years, Wiener did not talk much about his past in Germany. Instead, he embraced a new life as a British schoolboy, and later travelled the world as a scientist. But when he met his second wife, the teacher and writer Margaret Dunlop, she began noting down some of his stories. Eventually she encouraged him to share so many details it has become a book: Goodbye Berlin: the biography of Gerald Wiener.

“I was moved by some of the stories, like his mother putting him on a train in Berlin,” Dunlop tells me when I call the couple at their home in Inverness. “I thought - what a terrible thing.”

“I rejected Germany totally for a long, long time,” Wiener, now 91, says. His mother, with whom he was reunited after she also managed to escape to Britain, threw herself into a wartime career as a nurse. “I had one friend from my school days in Berlin, and he was more like a sort of brother to me, but they also left Germany way behind.”

It was during this period of his life that Wiener first picked up a New Statesman. He spent the war years in Oxford, mentored by the Spooner cousins Rosemary and Ruth, related to William Spooner, who gave his name to the speech error.

Then, in the 1960s, his work took him to Germany, where he met fellow researchers. “They all detested the Hitler years,” he recalls. “I started feeling they are no different to me. I no longer felt bitter about Germany.” 

Still, the Nazis' atrocities had left Wiener almost completely without family. He lost his grandfather, aunt and uncle in the Holocaust. His paternal family fled to the United States. By the time Wiener found them again when taking up a fellowship to study in the US in 1956, his father, who survived the concentration camps, had died of a heart attack.

The next decades were spent patching his family together, and also reclaiming a connection to Germany. Wiener’s half brothers, who were born in Shanghai continue to visit. His American nephew, who works in the music industry, has a German girlfriend and lives in Berlin.

Wiener, too, went back to Berlin. In the early 1990s, the city invited former refugees to visit the city, all expenses paid. With some reservations, Wiener and Dunlop took up the offer. “It was quite exciting to go and see places that had been in my childhood,” he says. He also found the old people's home his grandfather had sought refuge in, before being taken by the Nazis.

Meanwhile, his career was taking him around the world, from India to North Korea. His belief in academic collaboration helped to build the momentum for the Roslin Institute, whose scientists eventually cloned the sheep known as Dolly. 

Wiener, who votes Liberal Democrat, wanted to remain in the EU, and he feels “very angry” that 48 per cent of voters have been ignored.

He adds: “I would be surprised if there was a single university or college who was in favour of Brexit.”

As for another of the great challenges of the present, the refugee crisis, Wiener feels a deep empathy for those living in wartorn regions. “Obviously I feel very, very sympathetic to refugees from more or less wherever,” he says. He sees the current German Chancellor, Angela Merkel, who acted decisively on this matter, as “a bit of a beacon”. At the same time, he believes that in order to fully integrate, refugees must make learning English a priority. “When I go down the street, and I hear people who still don’t speak English, that is the one thing that upsets me,” he says.

If Wiener, a successful scientist, is an example of how Britain can benefit by continuing to offer sanctuary to the world’s desperate, there is, however, a dark undertone to his integration. As a teenager, he knew there was no way back to the Berlin of his childhood. “There was no young generation,” he says of that time. “There was no future.”

Goodbye Berlin is published by Birlinn Books.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

0800 7318496