I agree that there's larger political dysfunction that involves people from both parties and a convergence of generally weak leaders. That's the context S&P spoke about when it downgraded the U.S. credit rating. But this fight was a tactic launched by the Tea Party faction of the GOP. Given the linkage to the debt ceiling, a prospect that created the risk of national default at worst and a significant recession at best were the ceiling hit with no increase to quickly remedy the issue, it was an extreme tactic.
From a negotiating standpoint, it was a no-win effort. For a negotiation to succeed, each party must accommodate the other's needs (not maximum positions). The President needs his signature policy accomplishment. Therefore, material changes or repeal were never propositions he could accept. The Tea Party faction felt that it needed to delay or defund the ACA, but even as the entire GOP does not like the law, their opposition never approached the level of a need. Hence, at the end of the day, enough GOP Senators and Representatives voted to accept the compromise legislation that involved only a cosmetic ACA-related provision, one that could modestly enhance the law's operation, as elimination of possible fraud aids the legal framework.
Ironically, the linkage of the ACA to the debt ceiling/funding of government actually contributed to sustaining the law over the longer-term. Coverage of the continuing shutdown and looming possibility of default drowned out what was a rather rocky start to the law's implementation. As a result, public perceptions of the law were more favorable at the end of the impasse than they were preceding the impasse, even as the law got off to a rough start. However, there was neither the patience nor discipline to wait for actual data to become available and the emphasis was on repeal, not reform.
An attainable goal might have been a continuing resolution with modest reductions in spending and a larger budget conference for mandatory spending reform. Had a clean continuing resolution at somewhat lower spending levels been adopted, a compromise somewhat below current levels of spending would probably have been achievable. Deep spending cuts, almost certainly not.
Overall, the approach made no strategic sense. It resulted in economic losses estimated at $24 billion (some of which will be reversed in future quarters e.g., as furloughed workers receive back pay and spend some share of that income) and some that won't. It also led to some increase in short-term borrowing costs and some elevation in the nation's risk premium, developments that will lead to higher interest expenses than would otherwise have been the case. At the same time, the GOP's brand is damaged. Very likely that outcome assures that the GOP will not win the Senate in the 2014 elections. It also makes a number of GOP Senators who were potential Presidential candidates much less competitive nationally than might otherwise have been the case.
