James Baker, who served in the administrations of presidents Ronald Reagan and George H.W. Bush, called Republicans the losers in the debate that shut down the U.S. government for 16 days.
“My party, the Republican Party, I think, was a loser,” Baker said. “But I also think that the president and the Democratic Party was a loser because the world saw us in disarray. It really saw a failure of governance.”
Baker, Treasury secretary under Reagan and secretary of state under Bush, said on CNN’s “Fareed Zakaria GPS” that Senator Ted Cruz, the Texas Republican who was a leader of the fight to defund Obamacare in the debate over the fiscal 2014 budget and raising the amount the U.S. can borrow, hurt the Republican party.
“Was he wrong on this most recent episode, in my view? Yes,” Baker said on the program, broadcast today. “It hurt us. It didn’t gain us anything. We kicked the can just three months down the road. We didn’t accomplish anything.”
Democrats and Republicans reached a deal Oct. 16 to open the government. The agreement funds the government through Jan. 15, 2014, and suspends the debt limit through Feb. 7.
U.S. stocks rose for the week, sending the Standard & Poor’s 500 Index to a record, as Congress reached the deal to end the budget standoff and speculation grew that the Federal Reserve will maintain monetary stimulus. The S&P 500 Index rose 2.4 percent to 1,744.50 over the five days, for the biggest weekly gain since July. The Dow Jones Industrial Average advanced 162.54 points, or 1.1 percent, to 15,399.65.
Treasuries gained for the first time in three weeks as investors bet the Fed will delay tapering bond purchases. The yield on the benchmark 10-year note dropped by 11 basis points, or 0.11 percentage point, on the week to 2.58 percent in New York, according to Bloomberg Bond Trader prices.
Lawmakers must produce a budget compromise by Dec. 13, which sets up more potential conflict over taxes and spending on programs such as Social Security and Medicare.
Republicans should abandon the idea of defunding Obamacare -- also known as the Patient Protection and Affordable Care Act, Obama’s signature law mandating and expanding access to health coverage -- and instead focus on winning the Senate in 2014 and the White House in 2016, Baker said.