WASHINGTON, DC: The American political system and the electorate are famously known for punishing candidates and parties that toy with country’s larger interests. Everyone involved with the two-week long US government shutdown was aware of that, which is why the House Republicans blinked first, avoiding a calamitous default whose ripples would have been felt globally.
Nonetheless, before finally giving up at the 11th hour, they tested the nerve of the nation and the patience of the investors. The financial costs of the shutdown were also real. Standard & Poors estimates that the closure has shaved off $24 billion from the economy, and brought down the projected growth rate in the fourth quarter from 3 percent to 2.4 percent.
For obvious reasons, the biggest loser was Washington, DC. With fewer federal employees showing up for work and the city’s public museums and other attractions remaining closed, it may have lost as much as $217 million each day.
Like most political fights, this one also had clear-cut winners and losers. Without a doubt, it is President Obama who emerged as a winner in this war of nerves. The Democrat had maintained throughout that he won’t be blackmailed into negotiations and it was the obligation of Congress to pay for bills and programs it authorized in the first place. The Republicans’ failure to touch Obamacare—which was at the heart of the shutdown—was a big victory for the President.
In fact, the GOP revolt may have been a blessing in disguise for Obamacare. Open enrollment process for health insurance under the President’s signature health care plan began on October 1. But the enrollment rate was lower than expected due to technical glitches on its website.
But the larger controversy over the shutdown meant the there was hardly any focus on these problems. There would have been plenty of negative coverage had the media and the public not been obsessed with the shutdown and default debates. Polls have also shown that Obamacare is now more popular after the Republican revolt than before.
Another leader who came out stronger from the battle was Senate Majority Leader Harry Reid, who was instrumental in brokering a deal with the leading Republican in the Senate, Minority Leader Mitch McConnell, without surrendering anything. Combative and tactful, Reid is known as a master of political jujitsu. Even his critics admit that the current crisis enhanced the Majority Leader’s reputation.
The Democratic Party also came out tactically and politically better from the impasse. With the Republican brand taking a hit, Democrats – who stayed unified throughout the crisis, unlike their rivals – have a plausible path to recapturing the House next year.
If that happens, it will be a delicious irony. It was the backlash against the Obamacare that enabled the GOP to seize the House in 2010 by a historic margin. Now, if they lose control of the House, it will be because Republican lawmakers have overplayed their hands in the opposition against the same law that brought them to power.
Obviously, now that the fight is over, the overwhelming verdict among the pundits and strategists is that the Republican Party lost this one badly. Not only was the party not able to defund Obamacare, but it failed to win any major concessions from the Senate Democrats.
Many see this as a teachable moment for the firebrand Texas Sen. Ted Cruz, who many blame for the shutdown. The junior senator from the Lone Star state may have succeeded in becoming the face of the Tea Party movement in Congress, but his role as the agent provocateur of the current rebellion may come back to haunt him in 2016, when he is expected to run for President. In the end, his own party colleagues in the Senate turned against Cruz and he was pilloried for starting a fight without an endgame.