The worse the economy, the less likely that Congress will do anything about it
By Suzy Khimm,
ALEX WONG/GETTY IMAGES The worse the economic outlook gets, the harder it may be for Congress to do anything about it.
Thought the prospect of a second recession and another global economic collapse would finally compel legislators on Capitol Hill to act, easing some of the partisan polarization that has tied their hands? Think again. More bad news is instead likely to create more political hurdles for a Democratic administration and a split Congress to pass even modest legislation to aid employment and the economy.
After S&P announced Friday that it was downgrading the United States, citing the country’s political dysfunction as a primary reason, lawmakers immediately launched into a new round of partisan attacks. “The Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground,” House Speaker John Boehner (R-Ohio) declared. Democrats fired back just as forcefully. “By refusing to negotiate in good faith, Republicans turned the debt-ceiling debate into a hostage crisis, and last night we saw its first casualty,” Sen. Chris Coons (D-Del.) told The Post’s Zachary Goldfarb. Rather than being chastened by S&P’s warnings about the economic costs of hard-line politics, legislators instead chose to hunker down behind partisan lines.
“Everyone’s got their spin on it — there’s no consensus,” says former congressman Tom Davis (R-Va.). “The parties are very dug in.”
For instance, even if everyone agreed that the United States desperately needed help to revive its economy in the short term, it would simply reinforce the GOP’s line against the Democrats, Davis asserts. Most Democratic proposals for short-term help have centered on injecting immediate spending into the economy, the underlying argument being that the stimulus dropped off too early and didn’t go far enough. For Republicans, however, “the narrative is: ‘We tried your way, we’re worse off. Now you’re going to waste more and draw up the deficit more?’ ” Davis says.
Further drop-offs in the economy may only deepen this seemingly irreconcilable split on the Hill. “What sort of stimulus would simultaneously win a majority of the Republican caucus in the House and win enough support of Democrats and Republicans in the Senate to overcome a filibuster? I don’t know,” says John Sides, a political science professor at George Washington University.
Even a deeply disappointing jobs report could make it harder to build any new momentum in Congress. “The feeling is for both sides, it always supports their position,” says a senior Democratic aide. What’s more, if the economy worsens as President Obama comes closer to the 2012 election, it will be harder for him to convince congressional Republicans to throw him a life raft in terms of immediate action.
To be sure, in the past Congress has managed to overcome partisan gridlock under the threat of a singular economic crisis — when the nation’s biggest banks were about to fail in 2008, for instance, or last Tuesday, when the country nearly defaulted. But the absence of any single catastrophic threat may make it more difficult for a new, short-term economic plan to achieve liftoff in Congress. That’s why last week’s events, as bad as they were — with the stock market’s plunge on Thursday, a tepid jobs report and the S&P downgrade — haven’t created any new optimism for action on Capitol Hill.
“Even though the economy isn’t good and the threat of a double dip seems greater, I don’t feel the same sense of urgency that there was in the fall of 2008, when the stock market drop seemed to spur the passage of TARP,” Sides says. Like the health-care system, the United States has always been better at fixing acute, immediate problems than chronic maladies. And the constant stream of pretty bad, but not totally disastrous, news will make it that much harder to break the political logjam and pull the economy out of its quagmire.
Complicating matters is Obama’s 2012 reelection bid. Though the White House wants to seem proactive on jobs, advisers know that voters will judge the president on the state of the economy, and they want to dispel the notion that the country is imminently headed toward a cliff. “Indeed, the White House seems to want to tamp down the sense of urgency, given Jay Carney’s statement that they do not believe a double-dip recession is imminent,” Sides notes, referring to the White House press secretary’s comments last week. “If people are panicking, they’re only going to go with the other guy,” adds the Democratic aide. But Obama’s efforts to soothe fears about the economy may also make it more difficult for his Democratic allies to urge immediate, short-term action on the Hill. If there’s no need to panic, then what’s the rush?
To be sure, there’s a glint of hope that the most modest proposals have a chance, given how unhappy voters are with the economy. Extending the payroll tax holiday, for instance, could garner bipartisan support, since it wouldn’t force the GOP to relent on raising taxes. Some are still holding out hope that the congressional super-committee on the deficit will be able to break from the partisan stranglehold. But for the most part, as the economy looks worse, the prospects of immediate action in Congress aren’t looking better. “Just getting the regular work for the year done is going to be difficult,” said Davis, the former congressman.