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.

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Battle for Mosul: will this be the end of Islamic State?

The militant group's grip on power is slipping but it has proved resilient in the past.

The battle for Mosul is the latest stage in the long struggle to defeat Islamic State. The group has been around since the late 1990s in one form or another, constantly mutating in response to its environment. Undoubtedly its ejection from Mosul will be a significant moment in the group’s history, but it is unlikely to be its final chapter. The destruction of the group will only be complete when some fundamental changes occur within Iraq and the war in Syria comes to an end.

IS’s roots go back to a training camp established by the militant Islamist Abu Musab al Zarqawi in the late 1990s in Herat, Afghanistan. Founded as an army to overthrow the apostate regimes of the Levant, it fled to northern Iraq in the wake of the US-led invasion of Afghanistan post-9/11 where it re-established itself as a force alongside Ansar al Shariah, a hardline Salafi jihadi organisation.

As American attention shifted from Afghanistan to Iraq, the group was ideally placed to become one of the leading lights in the post-Saddam Iraqi insurgency. Brutally announcing itself to the world in August 2003 with successive attacks on the Jordanian Embassy in Baghdad, the UN headquarters and a Shia shrine in Najaf — the latter being the deadliest attack in Iraq that year with a death toll of 95 — the group grew to assume the mantle of al-Qaeda in Iraq. By 2006 this brand had become somewhat damaged through the brutal sectarian campaign the group waged, and when its founder, Zarqawi, died it sought to reinvent itself as the Mujahedeen Shura Council. This incarnation did not last long either, and eventually it assumed the title of the Islamic State of Iraq (ISI), alongside a more Iraqi leadership.

This was the start of a diffcult period in the group's history. Its excesses in Iraq (including indiscriminate slaughter of Shia Muslims to stir sectarian hatred and filmed decapitations of prisoners) lost it local support and led to the tribes in Sunni Iraq rising up and supporting the government in Baghdad's fight back against the group. By 2009, when the west abruptly stopped paying attention and withdrew from Iraq the group was largely perceived as in decline, with the Shia Muslim-led Iraqi government appearing to slowly assert itself more effectively across the country.

The terrorist attacks by the group continued. And the new government started to advance an increasingly sectarian agenda. These two played off each other in a downward spiral that was given a fresh boost of blood when the civil war in Syria erupted in 2011. Drawing on its existing networks (that were leftovers from when Syria was used as a staging point by the organisation to launch attacks into Iraq), the leadership sent a cell to Syria to explore what opportunities existed within the emerging fight there. This cell became the seed that grew into Jabhat al Nusrah and ultimately IS – a label the group adopted when in June 2013 IS leader Abu Bakr al-Baghdadi decided it was time to reveal this link between his Iraqi group and Jabhat al Nusrah. This led to divisions and the breaking up of the two organisations.

For IS, however, it was the beginning of an upward trajectory, building on this division to grow itself substantially in Syria (with Raqqa as its capital) and in 2014 taking over Iraq’s second biggest city of Mosul. We then reach the apex of IS’s success and the biggest expansion of the group yet.

It now seems that this growth had a shelf life of just two-and-a-half years. As the group appears to be losing Mosul, it is likely that we will see the beginning of a period of retraction. But this will not be its end – rather, it will flee back to the hills and the ungoverned spaces in Iraq and Syria from where it will continue a persistent terrorist strategy in both countries. Here it will bide its time until the moment presents itself to rise up. Waiting until the governance in Iraq and Syria fails its people again, the group can paint itself as the protector of Sunnis and once more build on that group's disenfranchisement to win supporters and occupy a space vacated by local governments.

IS's grip on power might currently be slipping but as history has shown, it has waxed and waned depending on the context it is operating in. We are now going to see a period of withdrawal, but unless attention is paid by the global community, it will expand again in the future.

Raffaello Pantucci is Director of International Security Studies at the Royal United Services Institute (RUSI). Visit his website at http://www.raffaellopantucci.com