Tea Party Vows Future Fights as Republicans Assess Damage

Oct. 17 (Bloomberg) -- Kenneth Rogoff, a Harvard University professor known for his studies of recessions, talks about the U.S. Senate's vote to reopen the government and raise the nation’s debt limit. He speaks from Boston with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

With each pull of a lever of power, Republicans sapped their own strength.

House Speaker John Boehner of Ohio may have had little choice in the fight over Obamacare other than showing his unyielding faction of Tea Party members what their strategy would bring, right up to the point of a potential economic calamity, said Mike Murphy, a Republican consultant who has advised several presidential campaigns.

“Republicans in the House, with a little help from Ted Cruz, got all excited with this stupid wing strategy that has now done a lot of damage to our brand,” said Murphy, in a reference to the Texas Republican senator who spurred the confrontation with the White House. “We’ve taken a big blow.”

Republicans used procedural rules to include measures to thwart Obamacare in legislation designed for appropriating funds to pay for government operations. They then used tactics to delay votes to the point that a breach of the $16.7 trillion debt ceiling came into play.

With each move, polls showed, they lost more public support and strengthened President Barack Obama’s resolve in a battle that ended last night with Senate and House passage of legislation to end the shutdown and lift the debt limit.

Photographer: Drew Angerer/Getty Images

Tea Party activists cheer during the "Exempt America from Obamacare" rally, on Capitol Hill, on September 10, 2013 in Washington, DC. Close

Tea Party activists cheer during the "Exempt America from Obamacare" rally, on Capitol... Read More

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Photographer: Drew Angerer/Getty Images

Tea Party activists cheer during the "Exempt America from Obamacare" rally, on Capitol Hill, on September 10, 2013 in Washington, DC.

The lessons Republicans draw from their defeat, starting with how they approach budget talks set to produce an accord by Dec. 13, will set the direction for the party.

Cruz and his supporters criticized the agreement reached to fund the government and raise the borrowing authority as a win for “the Washington establishment.” He described the House Republicans’ defiant stance as “a profile in courage.”

2016 Push

Health Exchanges: The Battle and Background

Heritage Action for America, the political arm of the Washington-based Heritage Foundation headed by former Republican Senator Jim DeMint of South Carolina, is saying that the party needs to add to its Tea Party-aligned faction in 2014 as a prelude to the 2016 presidential campaign in order to achieve the goal of repealing Obamacare.

“Everybody understands that we’re not going to be able to repeal this law until 2017 and that we have to win the Senate and we have to win the White House,” Michael Needham, chief executive officer of Heritage Action, said yesterday on Fox News.

As a consequence, there will be more challenges to incumbents in Republican primaries from candidates who share Cruz’s views. In Kansas, Milton Wolf, a 42-year-old Tea Party activist, announced Oct. 10 that he will challenge Senator Pat Roberts and Mississippi Senator Thad Cochran is facing similar threats. They join five other incumbents facing primary fights.

Business Reconsiders

Other groups had different takeaways from the impasse that shut the government down for 16 days. Business leaders are questioning whether the small-government Tea Party elements among Boehner’s members will reshape their own allegiances.

“Most business PACs have assumed that any Republican is generally acceptable on business issues,” said David French, senior vice president for government relations at the Washington-based National Retail Federation. “That’s an assumption we are reconsidering.”

“The current situation is being made more challenging by a handful of Republican candidates in the House. We’re going to look at a handful of races where we might be able to make a difference,” French added.

Senate Republicans said their House colleagues’ strategy of using the funding and debt measures to try to gut the Patient Protection and Affordable Care Act was flawed from the start. Obama and Senate Democrats refused those conditions from the outset, and had the power to stop it.

‘Fool’s Errand’

Senator John McCain of Arizona called it a “fool’s errand,” yet House members clung to their position even as polls showed 7 in 10 Americans disapproved of it and as their party took on an increasing share of blame for bringing the government to the doorstep of default.

The Debt Ceiling

They lost on every major point of the debate, and in the process put in jeopardy their chances to regain control of the Senate in 2014. Republicans need a net gain of six seats to win the 100-member chamber. Democrats are defending seven in states Republican Mitt Romney won in the 2012 presidential election.

“For now, the default debate, coupled with the shutdown of the government, has been to the detriment of Senate Republicans,” said Jennifer Duffy, senior editor of the Washington-based Cook Political Report, which tracks races. The Republicans’ “path to the majority was narrow before the shutdown and has gotten considerably more narrow since.”

Tea Party

“The big question now is how Tea Party voters react to the debt-ceiling deal,” she said. “If their reaction is very negative, it might provide some momentum to Tea Party candidates challenging GOP incumbents in primaries, depending, of course, on how an incumbent votes on the deal,” she said.

So conclusive was the defeat that Senator Lindsey Graham, a Republican from South Carolina, implored Democrats not to gloat and to help his party “find a way out of a bad spot.”

“We really did go too far,” said Graham, who is facing a primary challenge. “We screwed up. Their response is making things worse, not better.”

The same dispute that led both sides to this place will again be in play in January when Congress will next need to fund government operations, and only a month before another vote to increase the borrowing limit. Republicans now enter those negotiations splintered and with fewer options to pressure Democrats to accept their terms.

‘Learned Nothing’

“If they’re saying the defunding issue is going to come up again in three months, then they’ve learned nothing from this,” said Senator Kelly Ayotte, a New Hampshire Republican. “We’ve been asking from the beginning, what’s the end game? How do you achieve what you’re purporting to achieve on defunding Obamacare? And I never got an answer to that and I don’t think there still is an answer to that. If we learned nothing else from this exercise, I hope we learned that we shouldn’t get behind a strategy that cannot succeed.”

Still, Democrats didn’t achieve a proportional victory. An Oct. 7 CNN poll found that 63 percent of Americans were angry with Republicans because of the impasse, while 57 percent were mad at Democrats and 53 percent were angry with Obama.

The president had leverage in the fight that none of his opponents could match: he will never have to face voters again.

“That was one of the fundamental miscalculations of the whole thing,” said Terry Holt, a Republican consultant and former aide to House Speaker John Boehner.

That advantage allowed him to hold his position while Republicans kept waiting for him to bend as he had done in other fiscal fights. This time was different.

Threat Remote

Market reaction suggested those with the most at stake financially were convinced that Obama’s edge meant the threat of a default on U.S. obligations was remote.

U.S. stocks rallied yesterday, sending the Standard & Poor’s 500 Index toward a record. The benchmark index rose 1.4 percent to 1,721.54 at 4 p.m. in New York, erasing the previous day’s drop and rising to within 0.3 percent of its last closing record. Rates on Oct. 24 Treasury bills lost 27 basis points to 0.20 percent, erasing an earlier surge. The 10-year note yield decreased six basis points to 2.67 percent.

As in many battles, the president benefited from the quality of his opposition. The House Republicans’ strategy was doomed because it did not “define reality” at the outset, said Senator Ron Johnson of Wisconsin, a Republican elected in 2010 with strong backing from Tea Party supporters.

Republicans ended up divided when they had entered united in their opposition to the president.

Hyper-Partisan

“The differences are not about objectives, the differences are about tactics,” said Holt. “We have pretty successfully curbed spending by Washington standards over the past couple years and conservatives should count that as a victory. But in this hyper-partisan era, unless you get all of what you want, you don’t want anything.”

There is also little to suggest that the repetitive cycle of governing by crisis will abate. “This is the muddle through Congress,” Holt said. “We are going to lurch from disaster to disaster until we have the prelude, which is 2014 and then the next presidential election. There is no incentive for either side to give in, period.”

While voters assigned Republicans a greater share of the blame for the shutdown, they haven’t embraced Democrats. A Pew Research Center poll released Oct. 15 found that a record 74 percent of registered voters said most members of Congress shouldn’t be re-elected.

Incumbents’ Resilience

At similar junctures in the 2006 and 2010 midterm election cycles, only about 50 percent said they wanted to see most representatives turned out of office. In 2006, 87 percent of House incumbents and 79 percent of senators won re-election. In 2010, the numbers rose to 91 percent in the House and 84 percent in the Senate, according to the Brookings Institution in Washington.

“There are no winners in this process, everybody loses,” said Representative Charlie Dent, a Pennsylvania Republican who bucked his party’s position and supported passing a budget and raising the borrowing limit. “The only question you guys are trying to figure out is who loses more? And how long-term the damage will be?”

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

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