Dysfunction and Downgrades: Sad Parallels

Washington Watch

 August 12, 2011

Dr. James J. Zogby © 

President

Arab American Institute

Several sad parallels can be found in the bumbling way Washington dealt with raising the debt ceiling and averting financial catastrophe, and the U.S.'s overall handling of the search for Israeli-Palestinian peace.

When Standard and Poor's downgraded the U.S.'s bond rating, one of the main reasons they cited for their action were the dysfunctionalities the world had observed in the way politics in Washington impeded decision-making. The inability to make the compromises needed to address the country's fiscal crisis had shaken confidence. As a result of "the political brinksmanship" on display in Washington in recent months, Standard and Poor's judged the system to be "broken", arguing that the partisan stand-off was "not a serious way to run a country".  

It had been, by any measure, a sorry sight. On the one side, there was the President willing to compromise to achieve a "grand bargain" that would have resulted in a 10 year 4.3 Trillion dollar reduction in spending. But because the President's plan included some increases in revenues, Republicans rejected the proposal, refusing to negotiate any plan that might combine cuts in spending, with any form of increase in taxes. The result was a near fatal game of "chicken", as the clock ticked down to the day when the U.S. would run out of cash and the ability to borrow money in order to pay its bills. 

In the end the Administration blinked and a compromise, of sorts, was reached making only limited cuts in spending, while passing off the tough decisions still to be made to a bi-partisan Congressional committee whose prospects for success will be limited by the same ideological constraints that have just played out.

And so given this stand-off between "all or nothing" and a willingness to compromise, Standard and Poor's demonstrated its loss of confidence in the ability of Washington to get its financial house in order by downgrading the U.S.'s bond rating.  

Much the same scenario has been playing out in the U.S.'s approach to Israeli-Palestinian peace, reaching its climax in the dramatic "Netanyahu/Obama smackdown" that took place in late May. It was a sad and even disturbing spectacle.

In the first scene, President Obama, recognizing that the clock was ticking down on the possibility to achieve a negotiated two-state solution to the Israeli-Palestinian conflict, laid down, in a May 19th speech, what by any measure was a modest marker - the notion that "the '67 borders, with mutually agreed upon land swaps" should form the basis for any Israeli-Palestinian peace agreement.

Israel and its supporters in Washington not only balked, but mounted a direct challenge to the President. Israel's Prime Minister Netanyahu went to the White House and "lectured" Obama on the unacceptability of the U.S. President's marker. The Israeli leader then accepted an invitation from the Republican leadership in Congress to address a joint session of both Houses where he again challenged Obama and was greeted by repeated standing ovations by Members of both parties. The impact of this "schooling" of the President by Congress in support of the position of the leader of a foreign country was shocking to the rest of the world revealing, as it did, the dysfunctional nature of Washington's partisan politics and the inability of the U.S. to provide even a modest challenge to Israel.  All of this resulted in a loss of confidence in America's ability to exercise strong independent leadership in the search for peace.

Because we began our recent poll of Arab World attitudes toward the U.S. just a few days after this drama had finished playing out, the record low favorable ratings given to both the U.S. and President Obama can be understood as similar to Standard and Poor's downgrade of the U.S.'s bond rating. In this instance, it was a downgrade in America's leadership abilities as well as an indictment of the brokenness of politics in Washington.

In both the handling of the debt ceiling and the blocking of the President's peace-making efforts, politics were to blame. It was the way playing politics trumped rational problem-solving that: placed impediments in the way of finding real solutions to serious matters of state; cavalierly took America and the world to the brink of crises, without attention to the consequences of such reckless behavior; shook the world's confidence in the U.S.'s ability to act effectively and decisively to avert a disaster; and resulted in a degrading of the U.S.'s rating and standing as a respected leader.

What is both tragic and irritating is the way Republicans have reacted in the face of both self-inflicted wounds. When our poll results were first released, some Conservative publications were positively gleeful. From the beginning, they had wanted President Obama to fail in his efforts to reverse the damage done by the Bush Administration across the Middle East and change America's relationship with the Arab and Muslim Worlds. Blinded by their embrace of the neo-conservative's approach to the region, they wanted to continue the very policies that had dug deep holes, in effect, digging them deeper. They celebrated the low ratings Arabs were giving to President Obama as evidence that their efforts to stymie or weaken his initiatives were succeeding.

Similarly, they greeted the Standard and Poor's downgrade, not as an indictment of their intransigence, but as a club they could use to beat the President. In doing this they ignored the fact that 80% of the current debt faced by the U.S. was the result of the failed policies they had embraced during the Bush years (tax cuts that drained the Treasury of needed revenues, two costly wars, and an unfunded prescription drug plan that had been designed to benefit pharmaceutical companies more than senior citizens). Here too, their response was to propose more tax cuts and more war digging deeper the holes they had already dug.

If America is to reestablish confidence, either in its financial stability or its ability to demonstrate constructive leadership in the search for peace, this dysfunction must end. A dramatic change in direction is desperately needed.