Debt Ceiling and Politics

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ASU Management Professor Gerry Keim of the W.P. Carey School of Business talks about the politics behind the contentious battle in Congress to raise the debt ceiling.

Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. The president today signed a debt limit bill just hours before a deadline that threatened to send the government into default. The debt ceiling had been raised many times in the past, with very little contention. But not this time. Here to talk about what led to politicians to play a very dangerous game of chicken is Arizona state University management professor Jerry Keim of the W.P. Carey School of Business. Thanks for joining us. What are your thoughts on this whole brouhaha with the debt ceiling?

Gerry Keim: I think it's indicative of a bigger systemic problem. It's become more and more polarized, people have very conflicting views on what's best for America. The best organized parts of the party tend to be the most extreme in terms of their ideological position. And for most of the house members, they're very focused on what will happen in the primaries next spring. So they're very concerned about their position on that in those primaries.

Ted Simons: Regarding the primaries, is that the major motivation at play here?

Gerry Keim: Politicians are motivated by a number of things, but I think most of us who watch this process would agree that reelection is certainly one of the most important for most people. And in the primaries you have a very small percentage of the people who are old enough and eligible to vote, so, for example, in the -- you get more turnout when the president is running than in off years. In 2004, Arizona primaries we had about 12% of the people who could vote actually participating. In 2008, we had an unusual situation where there was no incumbent president. So you had competition for the presidency on both sides. So we had 24% of the people who could vote turned out. And the way that worked out, we had about 11% voting in the Democratic primary, and about 13% voting in the Republican primary. So with just two candidates, if you had just two, the winner then would need about 6.5% of the people to support them. If you have more than two candidates, the margins get smaller. So a few people can really make a difference.

Ted Simons: " We talk about motivation for politicians, what about for the public in the motivation for the voter? Why aren't those numbers higher? Are they happy with the way things are? Doesn't seem like it. Certainly the politicians tell you voters aren't happy. And yet most voters just can't be bothered.

Gerry Keim: Yeah. And there's a lot of different reasons why people don't vote. Certainly moving around frequently, Americans tend to move much more frequently than other folks do. Some states make it more difficult, some states make it easy, to some degree it's culture. You get high turnout in Wisconsin and Minnesota, relatively low turnout in states like Arizona and Arkansas. We are almost always a five percentage points below the national average in terms of voter turnout. Primary elections just don't seem to attract a lot of people. Part of it is I think that we have fewer competitive districts than we did 20 years ago. And the more extreme candidates are the ones that do most successful, so many of the folks in the middle of the distribution don't see a candidate they're attracted to, and don't participate in the primary.

Ted Simons: We often see uncontested primaries.

Gerry Keim: We do. We do see uncontested primaries, though even in the contested ones the contest is often between folks that are taking positions that the moderate would see as far to the left or right.

Ted Simons: Are incentives for politicians on this particular issue, are those incentives different than other issues?

Gerry Keim: Well, this is certainly a very big issue for the Republicans. The best organized part of the Republican party is this Tea Party movement and they're very focused on reducing government spending. So for the Republicans, yeah, this is a huge issue. For the democrats, they've always been the party of supporting entitlement programs for the poor, and for the elderly, but there's not a segment of their party that is quite as intensely vocal on those issues. As the Tea Party is on the Republican side.

Ted Simons: And yet do we know what voters, what the populous, what people think about these extreme positions? Because again, it seems like the extreme positions in this case, we can look back at the '60s and '70s and look at the left, we're looking at the right, it seems like extreme position do really get support.

Gerry Keim: They do. Particularly in the primary election. There's a lot of polling that indicates that the overwhelming majority of people who describe themselves as independent was like to see compromise, more than half the democrats would like to see compromise, but only about 30% of those who indicate the Republicans wanted to see compromise on this particular issue. So the positions are more difficult, and I think there's other changes that have taken place over time, it's far less likely that our elected officials know each other well now in Washington and with the case 20 years ago. Congress is only in session from noontime Tuesday to noontime Thursday, and that's because the members are back in their district and they're back in their district more because there are more and more organized groups that are requesting to see them. And everyone knows that people who are part of an organized group and turn out to see a politician, are people who will vote in the next election. So there's -- they're signaling they're your best customers. If you don't come back and talk with them, you do it as your own peril. And so as a result, people aren't in Washington, they don't get to note members across the aisle, they don't have the relationships they did before, so politics is much more transactional today, where it was more relational 20, 25 years ago.

Ted Simons: For those who say that's a good thing, the extreme positions are a good thing, that people need to hold firm, compromise isn't necessarily the best way to go, how do you respond to that?

Gerry Keim: In a democracy like ours, you've always got to get half of the people involved in the voting process, plus one to get anything done.

Ted Simons: But do you have to? Because it sounds like in this particular debate, the country is full of faith and credit, was not necessarily standing in the way for some folks.

Gerry Keim: That's right. I say to get anything done, and clearly lots of folks didn't want to get anything done. They were very happy with the status quo. And making a point that the ideological stand that would help them in the next election, and then they'll work on changing the attitude of their adversaries over the next two years. But I don't think we're going to see a lot of change in the attitudes of people that have starkly different views about what's the best thing to do for our fiscal policies.

Ted Simons: You see more of the same?

Gerry Keim: I do. Unless we make some fundamental changes, and I'm intrigued with this idea of creating more competition at the primary level, the open primary, so called the top two primary, where you have one primary and let everyone run in that race and everyone vote in that race. And it seems to me it would increase turnout, it would increase the likelihood that people are competing for more of the middle of the political spectrum. They're always unintended consequence was new policy, so it's difficult to see what else might happen, but when I compare it with what we see presently, it's hard to believe that on the margin it's not worth a try.

Ted Simons: Good to have you here.

Gerry Keim: Thank you very much.

Jerry Keim: Management Professor of the W.P. Carey School of Business;

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