The big news on Wall Street Monday: Democrats in Congress managed to change the president’s perceived agenda by refusing to give him the votes needed to nominate Lawrence Summers as Federal Reserve Chairman. As a result, Summers stepped down from the race.
But with the president and Speaker of the House John Boehner dealing with both parties leaning away from compromise and the political center, it seems economic adjustments that have to occur such as the debt ceiling debate and the federal budget are in for a testy run this fall.
The WSJ explains:
Raucous and emboldened liberal and conservative wings of Congress are reshaping the power structure in Washington, leaving neither President Barack Obama nor House Speaker John Boehner with a firm grasp on lawmakers ahead of crucial decisions about government spending and the debt ceiling.
The rising danger for Mr. Obama, say some political observers, is that the Summers withdrawal signals the president's inability to keep his party together.
"To me the lesson is lame duck-ism. Whenever a president projects weakness, it affects both parties,'' said Larry Sabato, director of the University of Virginia's Center for Politics. "His own troops are more likely to say 'every man for himself…and the other party, which is opposed anyway, sees this as a sign they will pay no price" for opposing the president.