The Daily Scoop: Is Congress to blame for a slowing US economy?

A rising chorus of voices, inside and outside Washington, is warning that political gridlock in Congress is now so severe that it has actually done damage to the economy – and threatens to do a lot more.

President Obama, of course, is the chief “blame Congress” finger-pointer, perhaps to be expected as he fights to win reelection as the economy flails. But plenty of others – Federal Reserve Chairman Ben Bernanke, the US Chamber of Commerce, and Congress’s own budget office, to name a few – also cite Congress as a factor that is inhibiting economic recovery, though they put it more diplomatically than does Mr. Obama.

Consider Mr. Bernanke’s reply to lawmakers when asked June 7 about Fed efforts to stimulate the economy via low interest rates: “I’d be much more comfortable,” he said, if “Congress would take some of this burden from us and address those issues.”

Or take this complaint about how “uncertainty” is causing small businesses to refrain from hiring and investing. “Most of this uncertainty … is coming out of Washington,” concludes a June 14 report from the National Federation of Independent Business.

Then there’s this tart assessment from the Congressional Budget Office about the consequences of lawmakers leaving unresolved some pressing decisions about future taxes and government spending. “Uncertainty about the resolution of fiscal policy early next year is weighing on the economy, we think, diminishing people’s and businesses’ spending this year,” said CBO Director Douglas Elmendorf in June.

Wait a minute, you say? What about the debt crisis in Europe? What about the long-suffering housing market and the costs of “Obamacare“? What about layoffs in state and local governments? What about lack of presidential leadership, perhaps? Are they not to blame for the US economy running out of steam?

True, say many economists, some or all of the above contribute. But evidence is mounting that Washington’s food fight last summer over raising the nation’s debt limit and the “fiscal cliff” that looms at year’s end are taking a toll on economic growth and employment. And both are crises manufactured in large part by an ineffective Congress.

Read more…


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7 Comments to “The Daily Scoop: Is Congress to blame for a slowing US economy?”

  1. There are more parties involved than Congress. But I most absolutely do believe they are the main factor in our snail-like recovery. McConnell foretold this in 2010.

  2. Thanks for the article. About two months ago I was talking with a friend (a current GOP/anti-Obama die hard) who can sometimes make sense. I made the statement that I was pointing the finger about the economy to the Congressional GOP for intentionally keeping the economy down in an attempt to help their own good. In other words, punish man Americans for their hopeful political gain. He’s a person who will quickly tell you want he thinks regards if he knows what he’s talking about or not, but pow … he said nothing … and didn’t even bring it up later.

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