24.10.2013
Tea Party: An enraged Frankenstein's monster
The Tea Party seemed to come from nowhere. But nowadays it is turning on its big business patrons and threatening the interests of capitalism itself, writes Jim Creegan
A fundamental question has run throughout our coverage of the Tea Party over the last four years: is it an Igor-like servant of the big bourgeoisie, deformed but dutiful? Or is it rather a Frankenstein’s monster - a petty bourgeois rabble that has escaped the control of a ruling class that nurtured and encouraged it? The recent government shutdown and debt-ceiling crisis have now supplied a definitive answer: a Frankenstein’s monster.
Having forced president Barack Obama to accept severe federal budget cuts (sequestration) in 2011 in exchange for their agreement to raise the debt ceiling,1 the Republican right aimed for a repeat performance. This time they hoped to delay implementation of the Affordable Care Act (or ACA, Obama’s new medical care law, commonly referred to as Obamacare), the main provisions of which took effect at the beginning of October, as a price for their cooperation in adopting a federal budget and raising the government debt ceiling. Their real aim was to kill the law.
Although the substantial government subsidies to the poor, workers and middle class that Obamacare provides will ultimately go into the pockets of the medical industry, the legislation has become an emblem of the things the Tea Party and their ilk despise more than mortal sin: of government subventions for the idle and undeserving poor, taken out of their hard-earned tax dollars, and of Obama himself. For them, a black president backed by a growing non-white majority represents the return of a social welfare agenda they thought they had buried forever in the 80s and 90s, and a deadly threat to the lily-white, small-town and suburban 1950s America of their sanitised imagination.
They feared that healthcare subsidies, once in place, would be too popular to reverse. They therefore took aim at what the president considered his signature political achievement, and began scheming shortly after the beginning of his second term to use their majority in the House of Representatives to hold the budget and the debt ceiling hostage against the sabotage of Obamacare.
At the beginning of the new fiscal year each October 1, Congress must approve a new budget to keep the government running; by October 17 it had also to assent to an increase in the debt limit in order to borrow more money, in the form of government bonds, to make up the difference between revenues and expenditures in the previous year. The Republicans vowed to withhold approval for both these items unless the White House and the Democrats agreed to delay the implementation of the ACA for a year.
Government shutdowns have not been unheard of in the past: one took place in 1978 and another in 1995-96. But threats regarding the debt ceiling, a much more serious matter, while they had been the subject of some haggling before, had never been used as a major bargaining chip until 2011.
Republican thrust
The Republican right seemed oblivious to the fact that the political climate had shifted since it took the House from the Democrats in the 2010 mid-term elections. In the interim, Mitt Romney had picked up the banner of his party’s right wing, only to carry it to defeat in 2012.
Moreover, Obama was politician enough to realise that any further surrender to the Republicans would embolden them to press for further concessions each time the budget and debt ceiling came up for a vote. He therefore served notice well before the deadlines arrived that he had no intention of negotiating over the ACA or any other major Republican demand presented in the course of this legislative process.
The Republicans were initially adamant. They were encouraged by a 2012 supreme court decision, in which the highest judicial body’s Republican-appointed majority allowed states to opt out of the law’s Medicaid extension provision on an individual basis. This provision made Medicaid (health insurance for the indigent, enacted in the 60s) newly available to those earning up to 130% above the poverty line; the federal government would cover 100% of the cost of the extension (Medicaid is disbursed by state governments) through subsidies to the states during the first year and 90% thereafter.
But 26 states, including all deep southern states but one, refused the subsidy, thus leaving eight million people - 68% of uninsured blacks and single mothers, and about 60% of the working poor - without cover. With those who needed Obamacare mostly now excluded, a freshman Texas senator, Ted Cruz, took to the floor of the upper chamber in late September to deliver a 21-hour harangue against the new law. The son of an anti-Castro Cuban refugee and graduate of Harvard law school, Cruz has become the new face of the congressional Tea Party. He obviously intends to run for president in 2016.
As the October 1 deadline approached, a stand-off ensued between the Democrat-controlled Senate and the Republican-dominated House. Several times the House adopted a proposed budget defunding the ACA. On each occasion the Senate rejected the House budget and put forward its own proposal restoring the funds, which was in turn rejected by the House. There were enough ‘moderate’ Republicans in the House willing to join the Democratic minority to pass a ‘clean CR’: ie, a ‘continuing resolution’ (budget proposal) stripped of the Obamacare defunding provision.
But the Republican speaker of the House, John Boehner, used his power under newly adopted rules to prevent such a measure from coming to a vote. More corporate than the Tea Party, Boehner nevertheless feared that defying the right might cost him his speakership. For their part, the Republican moderates could have forced such a vote by means of a procedural motion, but were afraid to go against Boehner.
So the back-and-forth between the House and Senate continued up till the deadline, at which point the threatened shutdown came to pass, lasting for 16 days.
In the event, it was somewhat less drastic than feared. Key government services - veterans’ affairs, air traffic control, social security and the national postal service - remained up and running. The pre-school programme for children, Head Start, was suspended, as were federally funded experimental medical treatments. By far the most visible casualty was the country’s national parks and monuments - all of which were forced to close. One such site, a World War II veterans’ memorial in Washington DC, became the scene of a low political farce, as House Republicans, including the head of the Tea Party caucus, Michele Bachmann, gathered there to taunt guards keeping a group of aged veterans out, and trying desperately to shift the blame for the shutdown onto Obama for refusing to negotiate with the Republicans over the ACA.
Perhaps the greatest damage came as a result of 80,000 government workers being furloughed indefinitely, and another 13 million being required to report to work without definite pay dates. This put a big dent in the economy of the entire urban conurbation of Washington, which revolves around the federal government. The withdrawal of government services is estimated to have cost the GDP about $3.2 billion, with even more damage done as a result of the loss of government contracts to private businesses and a drop in consumer confidence. About a quarter point was shaved off the national economic growth rate.
The threats not to raise the debt ceiling were a far more weighty matter. Failure to pay the interest on US government loans would have depleted the reserves of banks throughout the world, which depend directly or indirectly upon these interest payments to meet their own obligations. It would also have meant a sharp rise in interest rates, as lenders, uncertain about US’s ability to honour its obligations, would begin charging more for borrowing. This rise would in turn have sent the stock market sharply down, and caused a fall-off in business activity and hiring in an already depressed economy.
A return to 2008 conditions or worse in this country would have had strong ripple effects throughout the world economy as a whole.
Surrender
The nation’s top financial and corporate echelons were therefore unanimously opposed to toying with the notion of government default. They were not, however, as panicked as they were when the Tea Partiers first deployed this tactic in 2011. Fitch’s bond rating agency put the treasury’s AAA securities rating ‘under watch’, and there was some churning in the markets, but nothing close to the 700 point drop of two years earlier. The oligarchs seemed confident that the Republican leadership would step in to prevent a meltdown.
Their confidence was not misplaced. With Obama standing firm in his refusal to negotiate, it gradually dawned on rightwing House Republicans that their efforts were going nowhere. The greater public, becoming increasingly exasperated with Congress as a whole, and with both parties, clearly placed the major blame on the Republicans, who received approval ratings in the low 20s - the worst score for either party in the history of modern polling.
The Republicans first withdrew their demand that Obamacare be delayed in favour of lesser proposals - a repeal of a tax on medical devices enacted to help fund the ACA, a denial of health insurance to members of Congress and their staffs - in order to have something to show for their pains. When these face-savers were also rejected, the Republican leadership in the Senate, in the person of minority leader Mitch McConnell, weighed in with their counterparts in the House to convince them that surrender was the only option.
The Senate then drew up a bill that would fund the government until January 31, and raise the debt ceiling until February 7. The bill passed both houses of Congress with unanimous Democratic support and the votes of many ‘moderate’ Republicans. The only sop offered to the Republicans was a provision to tighten income verification procedures for those applying for subsidies under Obamacare. Thus ended the funding crisis - at least until the first months of 2014.
The outcome of the impasse was universally regarded as a victory for Obama and a total defeat for the Republicans. The left-liberal wing of the Democratic Party, recently disaffected by presidential threats against Syria, is for the moment united behind its leader as a result of his unyielding stance in the face of Republican blackmail. The ‘Grand Old Party’, on the other hand, is now more divided than ever before. The tensions that had been simmering over the past several years between its establishment and Tea Party wings - heightened in the wake of Romney’s defeat - have broken out into what the inventor of rightwing direct mail campaigns, Richard Viguerie, has called a “civil war”.
During the crisis leading establishment Republicans - senator John McCain of Arizona and representative Peter King of New York - publicly lambasted the obstructionism of their colleagues as irresponsible. Prominent party spokespersons began complaining that the stand-off diverted public attention from their main chance to discredit Obamacare: the disastrous rollout of the programme on October 1, when government computers were swamped by the volume of subsidy applications, and could not, due to woefully inadequate technical preparation, register more than a fraction of applicants. Big-money party backers, like the US Chamber of Commerce and Carl Rove’s Crossroads foundation are pledging to take a more active role in Republican primary contests next year, throwing their support behind GOP incumbents who backed the final resolution to the funding stand-off (18 senators and 144 Republican congresspersons did not).
These groups clearly speak with the voice of the big business wing of the party, which draws its strength from giant financial houses and corporations with a high national profile and a strong international presence. These forces favour cutbacks in government social spending, and many are less than enthusiastic about Obamacare. But they consider an international financial collapse, or even the threat of one, as too high a price to pay for promoting the austerity agenda. They are also keenly aware of the threat that chronic dysfunction at the highest level of government poses to America’s role as the world’s top banker and political and military power.
They are increasingly uncomfortable with Tea Party views on ‘social issues’ such as same-sex marriage and abortion. They think these positions stand in the way of potential general election victories. Particularly irksome to them is TP opposition to immigration reform (except those ‘reforms’ that make immigration more difficult). They see the country’s mainly Hispanic immigrants as a valuable cheap labour source, as well as a potential pool of votes for a Republican Party that is fast becoming isolated in a white man’s bunker.
Just as the US armed the Afghan mujahedin to fight the Soviet invasion, only to have the Islamists turn around and bite them two decades later, so the favoured party of big business, which fostered white middle class resentments since the 60s to create a social base for its attacks on the ‘welfare state’, now finds itself threatened by its own domestic spawn.
This writer has devoted much space in the past to the sociology and psychology of the Tea Party. What should be emphasised here is its basis in local business and politics in a sprawling country, where political power is widely dispersed. The TP core, like that of the larger party, consists of business people and professionals. But the most influential amongst them run successful small-to-medium enterprises with local or, at most, regional weight. Some of them are millionaires, but few are billionaires. A few big-business owners and foundations still provide substantial financial support to the Tea Party (although its most notorious backers, the Koch brothers, stopped short of endorsing its obstructionist tactics this time round).
Concentrated in the non-coastal, least cosmopolitan areas of the country, particularly but not exclusively in the south, their loudly proclaimed Americanism does not include elaborate lucubration concerning their country’s role in world politics or finance. They are abysmally and militantly ignorant. With the ‘communist menace’ gone, they see little point in foreign interventions. Their ‘patriotism’ is an affirmation of their predilections and prejudices; their aversion to ‘big government’ an ideological fig leaf for their desire to avoid annoying federal regulations on businesses and to keep their tax bills to a minimum, as well as their desire not to do anything to benefit the barbarians at the gate - one of whom now occupies the White House.
Just as many of them deny evolution and climate change, one of their spokesmen publicly scoffed at the notion that debt default would result in mayhem. A Florida congressman named Ted Yoho spoke for many when he opined: “I think, personally, it [default] would bring stability to world markets.” He reasoned that markets would be buoyed by the knowledge that the US had moved decisively to curb its debt.
As the base of the Tea Party is in local business, so its greatest strength is in local politics. Many of its congressional spokespersons were so intransigent because they are unafraid of being turned out of office. They represent safe congressional districts, many created or revised as a result of voter suppression and gerrymandering by Republican-controlled state legislatures. A good number of Republican members of the House of Representatives not associated with the Tea Party hesitated to defy its 60-some member caucus during the crisis for fear of being ‘primaried’ in the 2014 mid-term elections, when all of them must face the voters. Incumbents who would have been considered on the right wing of their party only 10 years ago are now being challenged in the primaries, often successfully, by candidates who paint them as liberal milksops. Those who voted for the bill that ended the crisis are particularly vulnerable. Extreme-right candidates outside the south have a harder time in general elections than in primaries, which is indeed another worry of Republicans now trying to curtail Tea Party influence.
The struggle within the party will erupt onto the national stage with the approach of the 2016 presidential elections. A battle for the nomination could easily take place between the Tea Party’s newest champion, senator Ted Cruz, and Chris Christie, New Jersey’s bloated, budget-slashing, union-bashing, corporation-pandering governor, now being touted by establishment Republicans as a ‘pragmatist’ and a ‘moderate’.
The most immediate political question is whether the Tea Party, given its past indifference to political winds, will deploy the same tactics that led to its defeat in 2013 when the budget and debt ceiling come once again before Congress in January and February. This question could cause dissention within TP ranks. A more general question concerns the longer-term prospects of the Grand Old Party’s ultra-reactionary insurgents and their effect on the party as a whole. Media pundits are entertaining the possibility that the party could go the way of the pre-civil war Whigs: ie, become extinct.
For the moment, however, secession is unlikely. The main struggle will be between the two factions for the control of the existing party. It is indeed tempting to think that GOP bigwigs have the Tea Party outgunned; that with the power of big money mobilised to defeat it, with the appeal of untrammelled individualism wearing off amid lingering economic distress, and with the country’s demographic trends running against it, the Tea Party will ultimately be brought to heel. Such a conclusion would be premature, however. Economic distress and imperial decline have been known to produce strange reversals.
Another symptom
And it is to the diagnosis of decline that the funding crisis supplies yet another symptom. For some time now, the US has been the beneficiary of the so-called virtuous circle, whereby its massive balance of payments deficit is compensated for by the return of foreign surplus dollars, especially from China, by foreign loans in the form of treasury bill purchases. Foreign investors have calculated up to now that, however high its indebtedness may be, the US is still the safest place to put their money.
But how long can such a reputation for stability survive in the face of repeated threats of default? The first Republican move against the debt ceiling (2011) caused overseas investors to look slightly askance; the second (2013) has now prompted the Chinese government to express serious concern about the dependability of US interest payments on its debt and to call for the ‘de-Americanisation’ of the world. A third non-payment threat in 2014 may just turn out to be a charm. The US economy is still too dominant to lose its status as an investment haven overnight. But how many 11th-hour panics will it take before T-bill purchasers start to diversify their foreign-holdings portfolios in a more serious way than they already have?
The 2013 imbroglio has also put a crimp in the Obama administration’s most important foreign-policy initiative: the ‘pivot towards Asia’: ie, the effort to counter growing Chinese power in the region by consolidating a pro-US military and economic alliance. Asian governments did not fail to appreciate the significance of the fact that Obama was forced by his Washington travails to cancel a trip to the region designed to promote the Trans-Pacific Partnership trade pact, intended to include a 12-member group, Japan and South Korea among them, which pointedly excludes China. Obama’s absence from the Asia-Pacific Economic Cooperation meeting in Bali, Indonesia, left China’s president, Xi Jinping, able to dominate the proceedings in order to push his own government’s trade initiative: the Comprehensive Economic Partnership, which excludes the United States.
The New York Times commented:
Coming after Mr Obama’s U-turn on intervention in Syria amid signs of a new American insularity, the revolt in the House of Representatives over healthcare left many Asians puzzling over America’s messy democracy and wondering if the United States would be able - or willing - to stand up to China in a confrontation.
That wariness … is giving China a new edge in the tug of war with the United States over influence in Asia, with the gravitational pull of China’s economy increasingly difficult to resist.2
The effect of the disturbance it has caused at the summits of American power has global effects and long-term consequences undreamt of in Tea Party philosophy.
Notes
1. See ‘Washington paralysis: a geriatric disorder’ Weekly Worker August 11 2011.