Eleventh-hour bailout?

THE IDEA of bringing the government of the United States of America to its knees has a certain appeal in various parts of the world. Broadly speaking, though, the reasons for this are very different from the motivations that guide the hardcore conservatives who bear primary responsibility for driving the dysfunctionality that has been evident in Washington over the past couple of weeks.

By Mahir Ali (Perspective)

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Published: Wed 16 Oct 2013, 10:53 PM

Last updated: Tue 7 Apr 2015, 7:17 PM

And it could get much worse unless tomorrow’s deadline for raising the nation’s debt ceiling is met. Negotiations were under way at the time of writing, and it seemed probable that some sort of agreement would be worked out to forestall a crunch that threatened not only to halt the US economic recovery, but to undermine the intricately interconnected international financial system.

Theoretically, that wouldn’t necessarily be an undesirable outcome. It is not particularly difficult, after all, to picture global capitalism as an insatiable beast that invariably preys on the weak. But is there a short-term alternative other than complete chaos — which, in many cases, would enhance the pain of the most vulnerable sections of society?

In the American domestic context, the most disturbing implications of a default would be a potential inability to issue Social Security cheques or pay Medicare bills. Somewhat perversely, that goes to the heart of the issues at stake in the congressional negotiations over the shutdown and the borrowing ceiling.

An irrationally conservative core in the Republican caucus is determined to somehow kill the Affordable Care Act, popularly known as Obamacare, notwithstanding its approval by both houses of Congress and, just last year, its endorsement by the Supreme Court.

Even in its initial form, the proposed law fell short of the universal health care provisions that have been the norm in most Western democracies for decades. Then it was furthered watered down, disqualifying the government from competing as a health insurer on an equal footing with private entities.

The aim was to reduce the proportion of Americans who find themselves unable to pay their medical bills. The act also entailed the expansion of Medicaid, which offers health coverage of those too poor to afford insurance. But it seems two-thirds of those who would have been covered by this extension will be left out,as they happen to live in Republican-controlled states that have refused to participate in the programme — despite the fact that it would be completely covered by the federal government for the first three years, and to the extent of at least 90 per cent thereafter.

This sort of bloody-mindedness is one of the aspects of American exceptionalism that foreigners find hard to grasp. The naysayers cite the principle of individual liberty. But in most cases their understanding of the concept is convoluted. It encompasses the right to bear arms, never mind that the ubiquity of gun ownership leads to the periodic massacre of innocents. But it does not extend to the right to medical care for everyone who needs it.

It could, of course, be argued that the US sustains similar hypocrisies on a worldwide scale, ostensibly supporting democratic trends but quietly slipping into bed with dictatorships wherever and whenever it suits its purposes to do so.

It is widely presumed that were the House of Representatives Speaker John Boehner to introduce a resolution lifting the debt ceiling and ending the government shutdown, it would readily pass, notwithstanding the House’s Republican majority — based more on the gerrymandering of congressional districts than on the popular vote — because many Republicans are wary of the Tea Party’s extremism. But Boehner has been reluctant to do so for fear of igniting the wrath of his party’s Taleban tendency.

The latter, meanwhile, has been so adamant about defunding or postponing the Affordable Care Act because it realises that once it is implemented, it would become much harder to oppose.

Although there are better than even chances of some sort of accommodation being hammered out at the eleventh hour, it is likely to be a time-constrained modus vivendi. If so, the prospect of a US default will rear its head once more a few weeks hence, and the shutdown may only be temporarily suspended.

Voters, who polls suggest are more inclined to blame the current impasse on the Republicans, will have the opportunity to offer a verdict in the November 2014 midterm elections. Should the status quo indefinitely persist, though, the international perception of the US as a potentially failed state can only grow.

Mahir Ali is a journalist based in Sydney

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