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The budget cliff

There are reasons to be hopeful, and they all have to do with money

If you and your beloved wanted to celebrate your mid-October anniversary with a drink or dinner at the Cliff House, then you got a rude awakening when you pulled up to the restaurant. Perched on the edge of the scenic hillside, the historic destination was forced to close due to the partial shutdown of the federal government.

You got a similar situation if you wanted to take out-of-town visitors to Alcatraz; the famous former prison was also shut down by Washington’s fiat. But the disruption to your plans was nothing compared to the disruption it caused to people who work there; the Examiner reports that Alcatraz Cruises, which ferries visitors to the island, lost about $3 million and had to lay off 15 people and furlough others.

It may be a popular notion to claim that what happens in the nation’s capital at the other end of the continent doesn’t affect us in the Bay Area, but the government shutdown shows how even just a partial shutdown — combined with the threat by hardcore congressional conservatives to risk a default of federal debt — can have a serious impact here.

It was not exactly a textbook example of political science in action. It all started with a struggle to tie a policy disagreement with the basic functioning of our country — at Alcatraz and across the nation.

If you look at the states and regions that are net contributors to the federal budget and net takers, you see a curious but pretty consistent pattern: The areas that are net contributors — that pay more into the federal budget than they receive in services and payments — are overwhelmingly “blue,” to use the popular political vernacular; net taker areas are overwhelmingly “red.” That is held up by many liberal polemicists as proof of conservative ignorance or even hypocrisy, but another explanation is that residents there are even more aware of government’s presence and spending because it affects them more, and therefore the conservatives among them see ever more examples of government largesse at times of huge deficits.

Whatever explanation you accept, the fact remains that conservative hostility to President Barack Obama’s presidency and particularly to his healthcare initiative, the Affordable Care Act or ObamaCare, have remained pretty much the only rallying point unifying a party made up of religious conservatives, libertarians, suburban moderates, and Wall Street business types. The struggle that led to the shutdown and threatened default were based on an attempt to delay and ultimately end ObamaCare; a quixotic quest in any case, considering the results of last November’s elections and the emphatic message from voters in surveys who said they did not want Congress to shut down the government for this reason, but one that appeared more fanatical than principled when Tea Party-allied House Republicans (egged on by Texas Senator Ted Cruz) demanded a one-year delay in return for keeping the government open; the separate but fast-approaching date at which the government would begin to default if the debt ceiling were not raised added extra tension to the standoff. Tea party members and their party’s leadership both expected President Obama and the Democrats to give them what they wanted in return for not cratering the national and global economies; but Obama has reportedly rued giving in to similar tactics in previous standoffs and was determined not to do so here.

In short, he didn’t give in, Democrats remained united in their opposition to the economic hostage-taking, and the Republicans kept pushing to get some kind of concessions up to the last minute, when they folded like a house of cards. San Francisco’s own Nancy Pelosi was not out front in the political bickering, but she earned credit for keeping House Democrats united in their opposition to the Tea Partiers’ plans.

In the agreement that ended the shutdown — opening up Alcatraz and the Cliff House, among many other shuttered places — and raised the debt ceiling, there are no measures that prevent us from ending up right back in the same place in several months, when the agreement ends. There are, however, other factors that give us good reason to hope for a different experience.

First, the agreement reflects the divides be-tween the U.S. House of Representatives and the Senate, and between different factions of the congressional Republicans themselves. The latter divide was the reason the disagreements got so nasty; the GOP is still undergoing a protracted and painful reaction to its failure in the 2012 election and adjustment to the growth of the power of the Tea Party faction, which is not allied with traditional Republican allies in the business community. The former divide was the reason we got out of it; Senate Republicans, with a few exceptions such as the aforementioned Cruz, tend to be more moderate because they represent entire states of diverse districts, rather than one all-red gerrymandered district, and they were able to reach a compromise agreement with the White House and Democratic leaders, who got almost everything they had demanded.

Second, when it became clear that the hardcore conservatives in the Congress were willing to risk default, and some even said there was no danger in doing so, the Republican Party’s traditional paymasters got religion and began to let it be known that this was a bad tactic. But this is more than them exerting pressure on party leaders; that’s what they do all the time. This is actually about them realizing they have helped bring about a party that is antithetical to their well-being and existence. Standard and Poor’s analyst John Chambers said that defaulting on federal debt would create a situation worse than the 2008 economic collapse. The Wall Street crowd doesn’t care much about gay marriage, abortion or drugs, but it does care about money. And when it realized that the Tea Party candidates were willing to push the country into a default that would have devastated the global financial system, it had to act.

Politico.com cites such GOP bigwigs as mega-bundler Paul Singer, who is looking to counter the impact of Tea Party candidates who flamed out so spectacularly in 2012, such as Todd Akin in a winnable Missouri Senate race. Other reports have revealed Wall Street donors telling Republicans, media and even Democrats that they’re going to hold back from supporting GOP candidates, or support more mainstream GOP candidates; some might even toss some money at a business-friendly Democratic candidate, and there are plenty of those.

That, in the final calculation, is why we might well see Congress act differently in the new year when the debt ceiling needs to be bumped upward and the government needs to be funded again. Part of the agreement that ended this standoff involved wrangling over which Republicans would serve on a budget conference committee to try to come up with a solution by mid-December to avert any recurrence of this fight. As Bay Area News Group political reporter Josh Richman pointed out at a recent Week to Week political roundtable in San Francisco, some Republicans held up the conference committee appointments in this agreement as their fig leaf to show they got something out of this whole debacle; but Democrats had been trying to get the GOP to appoint those conference members for months, so even that was a Democratic score.

Wall Street is all about winning, and the Republican Party in Congress isn’t.

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