MIAMI (Reuters) - They have been accused of holding Washington hostage by pushing the United States to the brink of a damaging debt default. The world is watching anxiously as the debt impasse drags on.
But it is a moment of triumph for many activists of the Tea Party movement, a grass-roots group devoted to cutting the debt and shrinking government which has gained a powerful bridgehead in the House of Representatives.
Many were claiming victory this week, as their refusal to compromise on spending threatened to trigger a historic default that could shake the global financial system and tip the fragile U.S. economy back into recession.
Some adherents of the movement, named after the historic Boston tax rebellion against the British in 1773, are indicating it may be time to compromise to avert financial catastrophe. But most remain defiant.
"We finally have an active grass-roots army and voting constituency demanding bold cuts to the budget and rewarding politicians who stand on principle, not politics," said Dick Armey, an unofficial leader of the movement.
Tea Party darling Sarah Palin, the former Alaska governor and unsuccessful U.S. vice presidential candidate in 2008, has led a chorus of calls to stand firm. "We cannot rob from our children and grandchildren's tomorrow to pay for our unchecked spending today," she said.
Critics complain she and other activists are misleading the public by likening the complex task of running the federal government to keeping households on a budget.
Congresswoman Michele Bachmann, a leader of the Tea Party caucus in the U.S. House of Representatives and contender for the 2012 Republican presidential nomination, has also flaunted her opposition to raising the debt ceiling.
"I won't raise taxes. I will reduce spending, and I won't vote to raise the debt ceiling," Bachmann said on Thursday. "And I have the titanium spine to see it through."
Armey, a former leader of Republicans in the House of Representatives, heads FreedomWorks, a group that funds and coordinates conservative activists across the country.
"If we go ahead and raise the debt ceiling without big spending cuts, spending caps or a balanced budget amendment to the Constitution, it does nothing for the long-term. I'm for the long-term solutions," he said.
The Tea Party grabbed the national political spotlight after President Barack Obama took office in early 2009 and much of its ire is directed at the Democratic president.
It has managed to push Republican candidates to the right in many electoral races and its demands are carrying weight in Congress. The movement played a big role in gaining 63 extra seats for the Republicans when they took control of the House in the 2010 midterm elections.
The current debt ceiling is $14.3 trillion and a failure to increase it by next Tuesday has triggered warnings from the Obama administration and others of global financial chaos.
Both FreedomWorks and Americans for Prosperity, a group started by billionaire David Koch that has worked with Tea Party groups, fiercely oppose raising the debt cap without major concessions.
The drive to drastically cut and cap spending levels and amend the U.S. constitution to bar federal government deficits is dominating rank-and-file meetings across the country.
It dovetails with the interests of some wealthy Americans like Koch, who want low taxes, limited oversight of business and industry and minimal government services for the needy.
The movement is not officially linked to the Republican Party, although its biggest impact legislatively so far has been through the influence of a block of conservative Republicans in the House. It bridles at suggestions from some critics that it is a so-called "Astro-Turf", or fake grass-roots, organization led from the top down.
Activists say the movement is broad-based, and born out of anger over corporate bailouts and a surge in government spending to counter the recent recession, although a CNN/ORC poll found only 1 percent of Americans are "active members."
Glenn Beck, the arch-conservative U.S. television host who has an almost cult-like following among many Tea Partiers, was mockingly depicted on the cover of The Economist news weekly as the "Mad Hatter" of the movement after the character in Lewis Carroll's "Alice's Adventures in Wonderland.
At a meeting the Bayshore Tea Party in New Jersey this week, Neil O'Connor, 67, a retired small business owner from Middletown, New Jersey, spoke with Beck-like patriotic fervor as he held forth on the great debt crisis debate.
"Default or be damned," said O'Connor, speaking against the backdrop of a huge American flag and a bookshelf prominently displaying one of Beck's best-sellers. "We are now engaged in a struggle for the survival of the Republic," he said. "We can default and force Obama to relent and go back to the original principles of sound fiscal government."
On Thursday in Alvin, Texas, where about 35 people filled the wooden benches of a small courthouse, Tea Party members touted the movement's ability to sway the debt debate.
"We wouldn't have had this debate if it wasn't for the Tea Party," said Dale Huls, a member of the Clear Lake Tea Party.
In Cedar Falls, Iowa, Judd Saul, head of a Tea Party chapter, said: "If it takes going into default and losing our triple-A credit rating - our inflated triple-A credit rating - in order for the government to learn its lesson, so be it."
That contrasts sharply with warnings from the likes of Christine Lagarde, the new head of the International Monetary Fund, that a U.S. default or significant downgrade would be a "very, very serious event" with international consequences.
The state news agency in China, America's biggest foreign creditor, took a similar view of the dysfunction in Washington on Friday. The United States has been "kidnapped" by "dangerously irresponsible" politics, the agency said.
But talk of default is anathema to some Tea Party activists and even some of the movement's staunchest allies in Congress have begun talking about the need to compromise to protect America's top and jealously-guarded debt rating.
Republican U.S. Representative Allen West, a freshman from Florida, has championed the Tea Party agenda. But he told Reuters on Wednesday he supported a compromise budget deficit plan drafted by House Speaker John Boehner but opposed by other Tea Party-backed fiscal conservatives.
"We can sit around and we can try to have the 100 percent perfect plan and then we end up losing," West said. "I have done the reasonable man thing," he said.
West did not elaborate on his willingness to make a deal. But he said the Tea Party would emerge stronger from the debt crisis talks as the movement and its backers set their sights on the state and national elections of 2012.
"Everyone said that we wanted to start having a conversation that was based upon cutting spending and not increasing spending. And I think in seven months you've seen that occur up here in Washington D.C.," said West.
Fred O'Neal, founder and former chairman of the Florida Tea Party, said the brinkmanship may already have gone too far in Washington.
"There are some people who want to burn down the house and they claim they're the Tea Party," said O'Neal. "That makes the rest of us look bad ... Burning down the house to kill the cockroaches isn't going to help," he said.
Additional reporting by Barbara Liston in Orlando, Kristina Cooke and Edith Honan in New Jersey, James B. Kelleher in Chicago, Chris Baltimore in Alvin, Texas and Donna Smith in Washington; Editing by David Storey