U.S. Fiscal Feud Sees No Heroes as Voters Assess Blame

Sept. 30 (Bloomberg) -- House Speaker John Boehner, Senate Majority Leader Harry Reid and U.S. President Barack Obama sound off on the possibility of a U.S. government shutdown. (Source: Bloomberg)

The partial shutdown of the U.S. government for the first time in 17 years has become a contest of who is wearing the cleanest dirty shirt.

President Barack Obama said Republicans who control the U.S. House are risking the economic recovery to derail the Affordable Care Act, even though it was upheld by the Supreme Court and ratified by his re-election. “You can’t shut it down,” Obama said yesterday of the health insurance program that begins enrollment today.

Some Republicans said they will continue to try to do so, while still lacking enough Senate votes to get such a measure through Congress or overturn a certain presidential veto.

“I don’t want to shut the government down but I also want to protect my constituents from this law,” said Representative Richard Hudson, a first-term Republican from North Carolina. “So I’ll do whatever it takes.”

Americans haven’t identified any heroes in the budget fight so far, akin to how Bill Gross, founder of Pacific Investment Management Co., referred to the U.S. bond market during the financial crisis as the “cleanest dirty shirt,” because the securities were the best only when compared to how bad the alternative options were.

While polls show Americans so far only blame Republicans slightly more than Democrats, they overwhelmingly oppose undermining the law known as Obamacare by shutting down the government or resisting an increase in the country’s debt limit, according to a Quinnipiac University poll released today.

Photographer: Andrew Harrer/Bloomberg

The U.S. flag flies at the U.S. Capitol in Washington, D.C. Close

The U.S. flag flies at the U.S. Capitol in Washington, D.C.

Close
Open
Photographer: Andrew Harrer/Bloomberg

The U.S. flag flies at the U.S. Capitol in Washington, D.C.

Shutdown Gap

By a margin of more than three to one -- 72 percent to 22 percent -- Americans oppose Congress “shutting down major activities of the federal government,” the poll found. By 64 percent to 27 percent, voters don’t want Congress to block an increase in the nation’s $16.7 trillion federal borrowing limit.

Overall, a majority of Americans, 58 percent, is opposed to cutting off funding for the insurance program that begins enrollment today. Thirty-four percent support defunding it.

“Unlike 1995, the public isn’t assigning more blame for a possible shutdown to one side,” said Andrew Kohut, the founding director of the center, referring to the last shutdown when Americans by 19 percentage points blamed Republicans more than Democrats.

“This may be a measure of how much more polarized we are these days compared to then,” Kohut said, adding that if the shutdown causes economic pain, such as job losses, Republicans will likely pay more of a price for causing it.

Photographer: Chris Kleponis/Bloomberg

“You can’t shut it down,” President Barack Obama said yesterday of the health insurance program that begins enrollment today. Close

“You can’t shut it down,” President Barack Obama said yesterday of the health insurance... Read More

Close
Open
Photographer: Chris Kleponis/Bloomberg

“You can’t shut it down,” President Barack Obama said yesterday of the health insurance program that begins enrollment today.

Only 10 percent of Americans approve of the job Congress is doing, according to the CNN poll, a record low for that survey. Obama’s approval rating was 45 percent in the September Bloomberg National Poll.

Anti-Democracy

Steve Jarding, a lecturer at Harvard’s Kennedy School of government and Democratic consultant, said Republicans have gone so far as to argue “against representative government.”

“Let’s just shut it down and eliminate it,” he said. “That line of thinking went out about the time of the Articles of Confederation.”

The latest poll figures signal a voter dissatisfaction that may lead to a 2014 election where “it’s a pox on both their houses, throw all of them out,” Jarding said. The current fight is “way beyond the issues. It’s not about what’s good for the country. It’s 100 percent politics.”

Concern that a shutdown would stunt economic growth sent stocks lower, trimming the biggest quarterly gain since the start of 2012, and the yield on 10-year Treasury notes traded at an almost seven-week low.

Markets React

The Standard & Poor’s Index (SPX) 500 fell 0.6 percent to 1,681.55 at 4:19 p.m. in New York. All 10 main industries in the S&P 500 dropped, with consumer goods, oil and gas and financial shares falling the most.

Photographer: Joshua Roberts/Bloomberg

Members of the Park Service place barricades in front of the Lincoln Memorial due to a partial government shut down in Washington, D.C., on Oct. 1, 2013. Close

Members of the Park Service place barricades in front of the Lincoln Memorial due to a... Read More

Close
Open
Photographer: Joshua Roberts/Bloomberg

Members of the Park Service place barricades in front of the Lincoln Memorial due to a partial government shut down in Washington, D.C., on Oct. 1, 2013.

Some of the political back-and-forth is intramural, as a split emerges among Republicans over the shutdown strategy.

“It is hard to see an advantage for the GOP,” said Terry Holt, a Republican consultant and informal adviser to House Speaker John Boehner of Ohio. “People expect their politicians to be practical and they see all this posturing as just more politics as usual. Voters know we oppose Obamacare and know we would get rid of it if we could. There is little advantage left in pursuing it.” “We should use the leverage we have in the debt-ceiling fight to get back our economic arguments, low taxes and growth policies. It’s too bad we are wasting that opportunity,” Holt said, referring to the approaching battle over raising the nation’s borrowing limit. Treasury Secretary Jacob J. Lew has told lawmakers that measures to avoid breaching the debt ceiling will be exhausted by Oct. 17.

Going Back

Republicans have been in this place before, selecting between a choice and an echo. It has created internal fissures that have roots in the primary campaign in 1964 that led to the nomination of Senator Barry Goldwater of Arizona. He went on to lose in a landslide to Lyndon Johnson, carrying only the Deep South states of South Carolina, Georgia, Alabama, Mississippi and Louisiana, plus his own state.

Supporters from those states help to form the foundation of the party leading the House today, said Curtis Gans, director of the Center for the Study of the American Electorate at American University in Washington.

Gans, who has studied turnout and voting patterns for more than three decades, said Goldwater won the nomination because his campaign’s grassroots organization was able to defeat the Republican establishment candidate, New York Governor Nelson Rockefeller.

Tea Party

Sentiments such as limiting the power of the federal government in favor of the states that Goldwater tapped into can be seen in the Tea Party activists today, Gans said.

“Goldwater lost in a landslide but those people stayed as part of the Republican Party,” Gans said.

Phyllis Schlafly, whose book entitled “A Choice Not an Echo” became Goldwater’s campaign slogan in 1964, said the current fight is a reprise of the one from half a century ago.

“I think the fight we are in is another ‘choice-not-an-echo’ fight,” she said. “That means a battle between the Republican establishment and the grassroots.”

Those so-called grassroots activists also are the most angry at government, according to the Pew poll released yesterday. In that survey, anger at government was the highest since the center began asking the question in 1997. Among those who called themselves conservative Republicans, 41 percent said they are angry at the federal government, compared with 26 percent of all Americans.

That explains in part Boehner’s dilemma. The most animating force in his party is the one that holds the most animus toward the federal government.

“Some of these guys just want to check the box -- ‘I shut down the government’ -- so it’s mostly political theater at this point,” Holt said. “Now we’ve voted more than 40 times and we’re shutting down the government over Obamacare -- what are we replacing it with? That’s the ultimate problem, because we’re not offering an alternative.”

To contact the reporter on this story: Michael Tackett in Washington at mtackett@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.