ANALYSIS: Democrats capitulate: Does debt deal imperil Obama?

By Frank Brandmaier Aug 3, 2011, 12:52 GMT

Washington - Weeks of bitter negotiations were engraved in US President Barack Obama's strained face when he announced a last-minute deal to rescue the nation's credit-worthiness.

It was the image of a president facing ever tougher fights to reach his goals. The campaign magic of 'Yes, we can!' faded just a little more with his concessions to intractable Republicans.

To add insult to injury, the same voices that once chanted Obama's 2008 presidential rallying cry the loudest were now screaming at the tops of their lungs about the debt-ceiling compromise.

'This is not shared sacrifice. This is capitulation to the radical fringe of a Republican Party that will not bend until they break this economy or get their own way,' Democratic Senator Robert Menendez said.

Democratic Congressman Emanuel Cleaver called the deal a 'sugar-coated Satan sandwich.'

Conservative Republicans, whose only foothold on power in Washington is their majority in the House of Representatives, appeared to be the big victors after weeks of stubborn wrangling with the left-leaning Democrats.

Revenue increases - even the repeal of Bush-era tax cuts for the highest earners - had been stomped out. The Democratic-controlled Senate was bowled over. Deficit-busting savings, Democratic critics worried, would be forged on the backs of the middle-class and the poor.

Even in the deepest core of Obama's supporters, there were murmurs of doubt about whether he was still in control.

Republicans crowed their victory Tuesday after the Senate approved the deal 74-26, and Obama signed into law a measure that raises the country's debt cap by up to 2.4 trillion dollars in two stages, while making at least 2.2 trillion dollars in spending cuts over the next 10 years.

The last round of voting started Monday evening, when the deal cleared the lower House, where Democrats were evenly split. A large majority of House Republicans supported the debt-ceiling increase, but it only passed with the support 95 Democrats, while the remaining 95 Democrats voted no.

Vice President Joe Biden was credited with convincing some moderate House Democrats to go along, albeit through heated arm-twisting. 'My sense is that they expressed all their frustration,' Biden said.

William Gale of the Brookings Institution, a centre-left Washington think tank, said there was a feeling that 'the final agreement was a complete capitulation by Democrats.' But he rapped all the politicians for creating weeks of 'enormous and wholly gratuitous uncertainty, at a time when the economy could ill afford it.'

'The deal is all spending cuts, no tax increases. In practical terms, that means that the burden of closing the gap will be placed on poor and middle-class households, rather than high-income or wealthy households,' Gale wrote.

William Galston, a former adviser to ex-president Bill Clinton, told the Washington Post that Obama's 'presidency is in jeopardy.'

'If he wants the power to make transformative change, he's going to have to make the argument for the change he wants to bring about,' Galston said. 'Whether he will choose to do it or is capable of doing so, I don't know.'

More optimistic voices say the compromise with Republicans, even if it appeared to be a defeat, could lure decisive independent voters back into the Obama camp, the Washington Post wrote.

The White House thinks it will be Republicans who will pay the piper in the next elections, as polls indicate higher dissatisfaction with the newly elected Tea Party Republicans - the faction that pushed negotiations to the brink - than with the rest of Washington.

'In the short term, everyone suffers politically. In the long term, I think the Republicans have done terrible damage to their brand, because now they're thoroughly defined by their most strident voices,' said Obama's top election advisor David Axelrod.

The weeks-long tug of war between Democrats and Republicans over the country's debt limit plunged Washington's standing even deeper among voters. In a recent Pew-Washington Post poll, participants were asked to pick words that described the debate: 66 per cent chose 'ridiculous.'

Fewer than 20 per cent feel the country is on the right course.