America's dangerous debt dance

By threatening debt default and government shutdown, Congressional Republicans are risking disaster.

The world turns, seasons come and go, the sun rises and falls, and the American government collapses into chaos at the mere mention of the possibility of passing a budget. Such is the way of things; and this week's crisis has given us just more of the dreary same, except that every time the cycle comes around again, the apocalyptic language gets dialled up a notch. Every time the band strikes up for the annual dance of President and Congress with shut-down and debt default, the music is that little bit louder, the tempo that little bit faster.

The Republican leadership in Congress - who already have a reputation for stubbornness that would make a mule blush and who sometimes act as if they really think this is all just a political dance, and not the actions of a government whose decisions affect people - truly rose to the occasion this time. They rolled out a preposterous set of demands from a long-list of Fox News talking points, including defunding Obamacare; dropping greenhouse gas and oil drilling restrictions, and the building of an expensive and controversial new oil pipeline, among others.

In the Senate, there were some fireworks: first-term Texas Republican Senator Ted Cruz tried to capture the drama of a filibuster in a silly but entertaining 21-hour speaking session which saw him, among other things,
reading Green Eggs and Ham to the Senate chamber.

Majority Leader Harry Reid ended the shenanigans by calling a vote in which the Senate overwhelmingly chose (79-19 - a super-majority, above the point at which hard-line Republicans like Cruz could filibuster) to cut off debate on the legislation. Then, the Senate voted along party lines to strip Republican policy demands from the bill, and passed what amounted to a stopgap that would fund the government until the middle of November. This has now been batted back to the House of Representatives, with Reid making it clear his Senate would not vote on any budget bill with Republican demands bolted on again.

Meanwhile on Wednesday, US Treasury Secretary Jack Lew sent a warning to the House of Representatives that the point at which the United States would be unable to pay its obligations - meaning a potentially catastrophic US default on debt - would be reached on October 17 if the debt ceiling, the self-imposed limit on US government borrowing, isn't raised. (The borrowing limit was actually reached in May, but the problem was put off by the imposition of the package of emergency measures known as the Sequester.)

The row over a bill to raise the debt ceiling has mirrored the row over the budget, with Republicans again demanding ideological bolt-ons; but the debt ceiling issue is the more important of the two: a government shutdown would be embarrassing and inconvenient, and might have economic implications if it went on for a while; but a US default on debt could potentially be an international financial disaster.

Why do we keep coming back here time after time? Congress have set ceiling limits to America's national debt since 1917, and have raised it without issue seventy-nine times since 1940, according to CNN's money blog. But now, partly due to a tribalisation of American politics in which the hard-line Republicans have to win points against the Democrats no matter what, and with an obstructionist Republican party in charge of the House, the debt ceiling has become a hostage with which to endlessly extract demands. Republicans counter with the argument that US debt is dangerously high. As of yesterday it stands at $16,738,443,175,473 and 97 cents, which is an impressive figure, though as a proportion of GDP it is by no means the highest among developed economies; many countries, including the UK, are higher, and Japan's is more than double that of the US.

But the Republican party is in a state of internal warfare. One one side are the moderates, who would like a conservative budget but are willing to work with Democrats on a compromise; and on the other are extremists whose loathing for the Obama administration is so great that they would risk a complete government shut-down and a US debt default to score points.

President Obama, for whom this is the fourth year that congressional Republicans have nearly forced the government into crisis, has clearly had enough. He giving a blistering speech in Washington yesterday:
 
“No Congress before this one has ever, ever, in history been irresponsible enough to threaten default, to threaten an economic shut-down, to suggest America not pay its bills, just to try to blackmail a President into giving them some concessions on issues that have nothing to do with a budget.”
 
Boehner, who is in thrall to his caucus, now has to choose between bringing the temporary measure passed by the Senate to a vote in the House, where it would probably pass with a combination of moderate Republican and Democrat votes but which would seriously undermine his position as speaker, or return Republican demands to the bill, which means continuing to face down the possibility of shutting off funding for the government, as well as ignoring the dangerous debt ceiling problem.
 
One ray of hope is that it is starting to look like Republican resolve is fading. “I don't want to be undercutting Boehner, but put it this way: I will not let the government shut down,” one Republican congressman, Peter King, told the New York Times. One possible alternative outcome is an even shorter-term solution than the Senate bill, one that would keep the government open just until the end of the week; keeping the music playing for just that little bit longer.
 
In the end, it seems that the price you pay for a governmental system composed of checks and balances is the risk of total gridlock. What America really needs is a reform of how this entire process occurs, but this is an impossible pipedream.
 
In the meantime, the world just has to hope that Congress can get this dance done and dusted and find a workable solution. Because at some point, the music is going to stop. And the silence will be deafening.
Senator Ted Cruz speaks to reporters after he spoke on the Senate floor for more than 21 hours. Photo:Getty.

Nicky Woolf is reporting for the New Statesman from the US. He tweets @NickyWoolf.

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Q&A: Would Brexit really move “the Jungle” to Dover?

The 2003 Le Touquet treaty was negotiated outside the EU.

What is David Cameron’s most recent claim about Britain leaving the EU?

The Prime Minister is claiming that Brexit could result in France ending the agreement by which British immigration officials carry out checks on those seeking to enter the UK in France.  

More specifically, Cameron thinks that a vote to leave the EU would give the French government an excuse to revoke the Le Touquet treaty of 2003, and that this would cause refugee camps akin to the Calais “Jungle” to spring up along the English south coast.

What’s the Le Touquet treaty?

In February 2003, Tony Blair went to the northern French resort of Le Touquet to try and persuade President Jacques Chirac to support British and American military action in Iraq. (He failed). 

Blair and Chirac hogged the headlines, but on the summit’s sidelines, Home Secretary David Blunkett and his French counterpart, an ambitious young politician named Nicolas Sarkozy, negotiated a treaty establishing juxtaposed controls at each country’s sea ports.

This agreement meant that British border police could set up and run immigration checkpoints at Calais – effectively moving the British border there from Dover. The treaty also enabled French border police to carry out checks in Dover.

British border police had already been operating at French Eurostar terminals since 2001, and manning the French entrance to the Eurotunnel since 1994.

What’s all this got to do with the EU?

Technically, nothing. The Le Touquet treaty is a bilateral agreement between the UK and France. Both countries happen to be member states of the EU, but the negotiations took place outside of the EU’s auspices.

That's why eurosceptics have reacted with such fury today. Arron Banks, the co-founder of Leave.EU, said the Prime Minister was “resorting to scaremongering”, while Ukip’s migration spokesperson, in a surprising role-reversal, said that Cameron’s argument was “based on fear, negativity, and a falsehood”.

Cameron’s claim appears to be that Brexit would represent such a profound shift in the UK’s relationship with other European states that it could offer France an excuse to end the agreement reached at Le Touquet. That is debatable, but any suggestion that the treaty would instantly become void in the event of a vote to leave is untrue.

Does France actually want to revoke the treaty?

Local politicians in Calais, and in particular the town’s mayor, have been arguing for months that the treaty should be abandoned. Le Monde has also criticised it. The current French Interior Minister, Bernard Cazeneuve, hinted today that he agreed, saying that a British vote to leave “will always result in countermeasures”.

On the BBC's Today programme this morning, Rob Whiteman, a former head of the UK Border Agency, said that it was “almost certain” that the treaty would end if the UK left the EU. He said that France has benefited less from the deal than it expected:

“I think at the time the French felt there would be an upside for them, in that if it was clear that people could not easily get to Britain it would stop Sangatte building up again. The camp was closed. But history has shown that not to be the case. The French authorities still have a huge amount of pressure on their side.”

That said, the French government receives money from the British to help police Calais and its camps, and various French officials have acknowledged that their ports would receive even more traffic if refugees and migrants believed that it was easier to travel  to the UK than before.

If the treaty ended, would “the Jungle” just move to Dover?

There’s little doubt that because of linguistic and familial ties, and perhaps the perception that the UK is more welcoming than France, many refugees and migrants would come to the UK as quickly as they could to claim asylum here.

Whiteman also said on Today that since the 2003 agreement, the annual number of asylum claims in the UK had declined from 80,000 to around 30,000. So the UK could expect a significant spike in claims if the treaty were to end.

But the British asylum process makes it unlikely that anything like “the Jungle” would spring up. Instead, those claiming asylum would be dispersed around the country or, if authorities are worried they would flee, held in an immigration detention centre.

Why is Cameron saying this now?

This looks suspiciously like one of the Tories' election strategist Lynton Crosby’s dead cats. That is, in an effort to distract his critics from the detail of the renegotiation, the PM has provoked a row about migrants and refugees. Cameron is clearly keen to move the debate on from the minutiae of different European agreements to bigger questions about security and terrorism. Though getting bogged down in competing interpretations of a treaty from 2003 may not be the best way to move onto that broader terrain.