Weakened state?

Another week, another political brawl in the nation’s capital. It seems like just last week we had back-to-back news coverage of the historic Speaker of the House voting marathon. Now, it’s the debt ceiling.

Treasury Secretary Janet Yellen implemented extraordinary accounting measures to keep paying the bills as the U.S. hit its debt ceiling. Best estimates hope that this will hold over the government until June. These fiscal fights have become a semi-regular hallmark of Washington for decades now. One of the last big showdowns in 2011 caused Standard & Poor to downgrade U.S. credit, sending markets into turmoil—partisanship’s economic cost.

Given the possibility of financial fallout and disruption hanging in the balance, will Congress and the Biden administration compromise to avert this crisis? Below we explore the political context surrounding the mess and what it means for the country.

1. Weak approval. President Biden approval remains largely unchanged from last year. But, digging deeper, his approval sits at a new low for Republicans; just 3% of Republicans approve of the president’s job in office. Democrats are buoying Biden, but the other side won't have it.
2. Public debt’s public mess. Democrats and Republicans remain at an impasse—Biden won’t negotiate with Republicans, and Republicans demand budget cuts. It sounds and feels like a similar standoff in 2011 between then-President Obama and the GOP. The result, then? Nothing good—downgrading U.S. credit and sending markets tumbling. A bit of hysteria? We will see.
3. Shutdown blues. Fighting over money and shutting down the normal functioning of government is unpopular with most Americans. Republicans are more split on this than Democrats or independents. Dysfunction doesn’t win (all the time).
4. Points to win? Most Americans look unfavorably at Congress. With numbers like this, it’s hard to imagine Congress coming out on top from any debt ceiling fight. As the two parties try to blame the other side, Americans seem willing to pass the blame around. Congress is everyone’s punching bag.
5. Meeting expectations. At the start of the year, majorities across the board felt that Republicans and President Biden are not likely to get anything done together in the next two years. Americans expected gridlock, and Washington seems to be delivering. Will this come to pass?

A lot is hanging in the balance as Democrats and Republicans clash over the latest political pawn. It’s just that this time the global economy may be what’s at stake if talks go south.

The debt ceiling is yet another example of how tribalism tears at the seams of consensus. We will have to wait and see how this all shakes out. But expect grueling gridlock until the political pressure is turned up even higher. Sometimes severe crisis is what finally focuses the mind. We will see.