Obama weakened as US passes debt bill

The immediate crisis has been averted, but the president has capitulated on nearly all of his key de

Hours ahead of the Treasury deadline that could have seen the US default for the first time in its history, the House of Representatives voted overwhelmingly in favour of a deal to raise the debt ceiling.

Reluctantly, both Democrats and Republicans voted the legislation through, although there were significant revolts on each side. It passed by 269 to 161 votes.

It will now be voted on by the Senate, although this is largely a formality as it has a Democratic majority. The House, which since November's mid-terms has been made up of many hardline Tea Party Republicans, was the main problem. Although the bill is seen by many as a complete capitulation by the president, many Republicans are still angry that the cuts outlined in the legislation do not go far enough.

While there is a sense of relief that the crisis has been ended without a potentially catastrophic default, Democrats are understandably frustrated as they have emerged from weeks of stand-off with little to show for it. Not only has Barack Obama surrendered on most of the key points, promising more than $2tn in spending cuts over the next ten years, but because a deal was reached so close to the deadline, the bill has not undergone the normal scrutiny.

It is a significant shift in fiscal policy at a time when economic recovery is fragile. Unemployment remains above 9 per cent, growth is slowing, and there is now no scope for any economic stimulus. Democrats also fear that it is the poor who will lose the most. In one of his main surrenders, Obama has agreed not to seek extra tax revenue. Given that George Bush's tax cuts for the rich are the main cause of the deficit (see this chart), this means the deficit will stay sky-high. Democrats hope to re-open this debate at a later stage.

The sense that Obama has caved in to the unreasonable voices on the right is also a cause of frustration. Writing last night, the Nobel-winning economist Paul Krugman criticised Obama for refusing to consider tabling the 14th Amendment to push his version through:

Those legal options are still there. Obama can move now; and even if he eventually loses in the courts, that gives him time.

Sure, it's risky. But the whole situation is immensely risky, thanks to the extremism and bloody-mindedness of the right. There are no safe options, and trying to play it safe when there is no safety lands you, well, where Obama is right now.

While laudable in theory, Obama's wish to seek reasonable, bipartisan solutions in the most partisan, extreme era the White House has seen for decades makes him a hostage to fortune.

The immediate crisis may have been averted, but this stand-off has shown how drastically the mainstream debate has been pulled to the right. It has also given a hint of the lines along which the next election will be fought -- drastically differing views on the size and scale of the state. Obama would do well to find his voice and be more assertive by then, if he does not want to lose the support of his own party.

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

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Why the Liberal Democrats by-election surge is not all it seems

The Lib Dems chalked up impressive results in Stoke and Copeland. But just how much of a fight back is it?

By the now conventional post-Brexit logic, Stoke and Copeland ought to have been uniquely inhospitable for the Lib Dems. 

The party lost its deposit in both seats in 2015, and has no representation on either council. So too were the referendum odds stacked against it: in Stoke, the so-called Brexit capital of Britain, 70 per cent of voters backed Leave last June, as did 62 per cent in Copeland. And, as Stephen has written before, the Lib Dems’ mini-revival has so far been most pronounced in affluent, Conservative-leaning areas which swung for remain. 

So what explains the modest – but impressive – surges in their vote share in yesterday’s contests? In Stoke, where they finished fifth in 2015, the party won 9.8 per cent of the vote, up 5.7 percentage points. They also more than doubled their vote share in Copeland, where they beat Ukip for third with 7.3 per cent share of the vote.

The Brexit explanation is a tempting and not entirely invalid one. Each seat’s not insignificant pro-EU minority was more or less ignored by most of the national media, for whom the existence of remainers in what we’re now obliged to call “left-behind Britain” is often a nuance too far. With the Prime Minister Theresa May pushing for a hard Brexit and Labour leader Jeremy Corbyn waving it through, Lib Dem leader Tim Farron has made the pro-EU narrative his own. As was the case for Charles Kennedy in the Iraq War years, this confers upon the Lib Dems a status and platform they were denied as the junior partners in coalition. 

While their stance on Europe is slowly but surely helping the Lib Dems rebuild their pre-2015 demographic core - students, graduates and middle-class professionals employed in the public sector – last night’s results, particularly in Stoke, also give them reason for mild disappointment. 

In Stoke, campaign staffers privately predicted they might manage to beat Ukip for second or third place. The party ran a full campaign for the first time in several years, and canvassing returns suggested significant numbers of Labour voters, mainly public sector workers disenchanted with Corbyn’s stance on Europe, were set to vote Lib Dem. Nor were they intimidated by the Brexit factor: recent council by-elections in Sunderland and Rotheram, which both voted decisively to leave, saw the Lib Dems win seats for the first time on massive swings. 

So it could well be argued that their candidate, local cardiologist Zulfiqar Ali, ought to have done better. Staffordshire University’s campus, which Tim Farron visited as part of a voter registration drive, falls within the seat’s boundaries. Ali, unlike his Labour competitor Gareth Snell and Ukip leader Paul Nuttall, didn’t have his campaign derailed or disrupted by negative media attention. Unlike the Tory candidate Jack Brereton, he had the benefit of being older than 25. And, like 15 per cent of the electorate, he is of Kashmiri origin.  

In public and in private, Lib Dems say the fact that Stoke was a two-horse race between Labour and Ukip ultimately worked to their disadvantage. The prospect of Nuttall as their MP may well have been enough to convince a good number of the Labour waverers mentioned earlier to back Snell. 

With his party hovering at around 10 per cent in national polls, last night’s results give Farron cause for optimism – especially after their near-wipeout in 2015. But it’s easy to forget the bigger picture in all of this. The party have chalked up a string of impressive parliamentary by-election results – second in Witney, a spectacular win in Richmond Park, third in Sleaford and Copeland, and a strong fourth in Stoke. 

However, most of these results represent a reversion to, or indeed an underperformance compared to, the party’s pre-2015 norm. With the notable exception of Richmond’s Sarah Olney, who only joined the Lib Dems after the last general election, these candidates haven’t - or the Lib Dem vote - come from nowhere. Zulfiqar Ali previously sat on the council in Stoke and had fought the seat before, and Witney’s Liz Leffman and Sleaford’s Ross Pepper are both popular local councillors. And for all the excited commentary about Richmond, it was, of course, held by the Lib Dems for 13 years before Zac Goldsmith won it for the Tories in 2010. 

The EU referendum may have given the Lib Dems a new lease of life, but, as their #LibDemFightback trope suggests, they’re best understood as a revanchist, and not insurgent, force. Much has been said about Brexit realigning our politics, but, for now at least, the party’s new normal is looking quite a lot like the old one.