U.S. President Barack Obama signs the Budget Control Act of 2011 in the Oval Office at the White House in Washington, August 2, 2011.HO/Reuters
The U.S. debt-ceiling crisis highlighted the precarious, brittle state of the U.S. economy and public finances. But the result, approved by Congress on Tuesday, also spotlights one of President Barack Obama's most significant blind spots - his insistence on reasonableness in dealing with unreasonable political opponents.
The deal cuts federal spending by around $2.1-trillion over 10 years. That's an impressive dent into the country's debt, and so the compromise is, on one level, an appealing, bipartisan solution.
Go deeper, however, and Republicans seem to have outmanoeuvred Mr. Obama and the Democrats at every turn. Poorer Americans such as housing-allowance recipients or Medicaid beneficiaries will be hit - either directly through the legislation, or by a congressional committee empowered to make up to $1.5-trillion in cuts. Tax reforms that would also have helped reduce the debt are entirely absent. The Tea Party succeeded in getting a requirement that a balanced-budget amendment to the Constitution be tabled in Congress. It's not surprising, therefore, that exactly half of all House Democrats voted against the deal.
That alone is a sufficient indictment of Mr. Obama's leadership. But in remarks after the Senate's approval, Mr. Obama asked Congress to take up his old economic agenda: more investment, and more talk of "a balanced approach where everything is on the table" to complete the task of deficit reduction.
It was as though Mr. Obama had forgotten what had just happened. He had taken most things off the table himself. To get what he seeks, Mr. Obama will receive little help from Congress; he will need a new electoral mandate. Yet his capitulation this weekend calls his commitment to his own economic ideas into question.
The deal was a net positive for the country's balance sheet. The U.S. needs to deal with its debt problem, but as Mr. Obama says, all must play a part - not just recipients of government funding.
If only Mr. Obama could act on his words. His overriding instinct is to seek compromise and the middle ground. He needs to develop that other political instinct - to fight for his values.