JohnButts@JBMedia - Reports:
President Barack Obama and Congress stand at a junction.
The road the
country has been on for the past five years is now beginning to come to
an end. The Federal Reserve, which pumped $3 trillion into the economy
to keep the Great Recession from worsening, is withdrawing its financial
lifeline amid signs of fresh economic growth. The nation's gross
domestic product is inching up, and annual federal budget deficits are
heading down.
country has been on for the past five years is now beginning to come to
an end. The Federal Reserve, which pumped $3 trillion into the economy
to keep the Great Recession from worsening, is withdrawing its financial
lifeline amid signs of fresh economic growth. The nation's gross
domestic product is inching up, and annual federal budget deficits are
heading down.
How Washington
policymakers respond to the improvements in the economy may even sow the
seeds for more cooperation in Washington.
But don't count on it.policymakers respond to the improvements in the economy may even sow the
seeds for more cooperation in Washington.
Finger-pointing
still abounds between the Democrats who control the White House and the
Senate and the Republicans who control the House of Representatives
ahead of midterm elections later this year that will determine control
of Congress for the remainder of Obama's presidency.
still abounds between the Democrats who control the White House and the
Senate and the Republicans who control the House of Representatives
ahead of midterm elections later this year that will determine control
of Congress for the remainder of Obama's presidency.
"The president's policies are not working," House Speaker John Boehner, R-Ohio, declared.
Senate
Majority Leader Harry Reid, D-Nev., countered: "We cannot have a
country that's paralyzed because of a group of people — the group of
people who are the tea party-driven Republicans in Congress."
Majority Leader Harry Reid, D-Nev., countered: "We cannot have a
country that's paralyzed because of a group of people — the group of
people who are the tea party-driven Republicans in Congress."
"There
are no winners here," suggested Obama, with just under three years to
go to complete his economic legacy. "The American people are completely
fed up with Washington."
are no winners here," suggested Obama, with just under three years to
go to complete his economic legacy. "The American people are completely
fed up with Washington."
An important indicator of
the state of the economy came Friday, when the Labor Department reported
that the U.S. jobless rate in January fell to a five-year low of 6.6
percent. But employers added just 113,000 jobs, a modest gain. The
numbers were a slight improvement from the 6.7 percent rate of the month
before and a lot lower than the 10 percent reached briefly in 2009. But
that is still significantly higher than the 5 percent or lower
unemployment rate that usually signifies a healthy economy.
the state of the economy came Friday, when the Labor Department reported
that the U.S. jobless rate in January fell to a five-year low of 6.6
percent. But employers added just 113,000 jobs, a modest gain. The
numbers were a slight improvement from the 6.7 percent rate of the month
before and a lot lower than the 10 percent reached briefly in 2009. But
that is still significantly higher than the 5 percent or lower
unemployment rate that usually signifies a healthy economy.
But
even as public confidence in the economy is improving, polls also show
that Americans' approval of Congress is at or near record lows.
even as public confidence in the economy is improving, polls also show
that Americans' approval of Congress is at or near record lows.
More
key fiscal battles are looming after self-inflicted wounds like last
fall's government shutdown and repeated debt-limit crises over the past
few years.
key fiscal battles are looming after self-inflicted wounds like last
fall's government shutdown and repeated debt-limit crises over the past
few years.
The federal
government once again is about to bump into the limit on its borrowing
authority, which is set by law. Last October's deal to end the 16-day
partial government shutdown suspended the debt ceiling until Feb. 7.
That's Friday.
government once again is about to bump into the limit on its borrowing
authority, which is set by law. Last October's deal to end the 16-day
partial government shutdown suspended the debt ceiling until Feb. 7.
That's Friday.
Treasury
Secretary Jacob Lew has urged Congress to act quickly to raise the debt
limit, saying "at some point very soon," probably by month's end, he'll
run out of delaying strategies, and the nation could default for the
first time ever on some of its debt.
Secretary Jacob Lew has urged Congress to act quickly to raise the debt
limit, saying "at some point very soon," probably by month's end, he'll
run out of delaying strategies, and the nation could default for the
first time ever on some of its debt.
"This
can and should be a breakthrough year for our economy," Lew told the
Bipartisan Policy Center. "The table is now set for us to build on the
economic progress that we have made over the last five years — and it is
incumbent on Washington to be part of the solution, and to avoid the
brinksmanship of recent years that has done so much to diminish economic
momentum."
can and should be a breakthrough year for our economy," Lew told the
Bipartisan Policy Center. "The table is now set for us to build on the
economic progress that we have made over the last five years — and it is
incumbent on Washington to be part of the solution, and to avoid the
brinksmanship of recent years that has done so much to diminish economic
momentum."
Some congressional
Republicans are looking for concessions from the administration in
exchange for their support on the debt limit increase.
Republicans are looking for concessions from the administration in
exchange for their support on the debt limit increase.
Also, early next month,
Obama will submit his federal budget for the fiscal year that begins
Oct. 1. Presidential budgets almost always trigger partisan warfare. In
fact, the White House is already drawing heat from some Republicans for
delaying its fiscal 2015 budget submission by a month. Presidential
budgets are traditionally sent to Congress in early February.
Obama will submit his federal budget for the fiscal year that begins
Oct. 1. Presidential budgets almost always trigger partisan warfare. In
fact, the White House is already drawing heat from some Republicans for
delaying its fiscal 2015 budget submission by a month. Presidential
budgets are traditionally sent to Congress in early February.
"The
president failed to meet one of his most basic responsibilities —
submit a budget to Congress," complained Sen. John Cornyn, R-Texas,
noting that Obama had called on Congress only two weeks ago in his State
of the Union address to act quickly on his priorities. Cornyn is the
sponsor of a bill that would withhold Lew's government salary for every
day the president's budget is late.
president failed to meet one of his most basic responsibilities —
submit a budget to Congress," complained Sen. John Cornyn, R-Texas,
noting that Obama had called on Congress only two weeks ago in his State
of the Union address to act quickly on his priorities. Cornyn is the
sponsor of a bill that would withhold Lew's government salary for every
day the president's budget is late.
Republicans
constantly blame Obama and Democrats on Capitol Hill for a range of
problems, beginning with the president's rocky rollout of his health
care overhaul and expensive government programs, claiming such policies
are threatening to derail the recovery that began in 2009. Democrats, in
turn, point at Republicans and accuse them of triggering the government
shutdown and advocating hurtful spending cuts on social programs.
constantly blame Obama and Democrats on Capitol Hill for a range of
problems, beginning with the president's rocky rollout of his health
care overhaul and expensive government programs, claiming such policies
are threatening to derail the recovery that began in 2009. Democrats, in
turn, point at Republicans and accuse them of triggering the government
shutdown and advocating hurtful spending cuts on social programs.
Both
parties are mindful of the enormous public anger that the shutdown
ignited and its damage to the economy. Many don't seem quite as eager to
go to the mat again, especially on the fast-approaching debt ceiling.
parties are mindful of the enormous public anger that the shutdown
ignited and its damage to the economy. Many don't seem quite as eager to
go to the mat again, especially on the fast-approaching debt ceiling.
"The
goal here is to increase the debt ceiling," Boehner told reporters. "No
one wants to default on our debt." However, the House speaker didn't
rule out trying to get something in return for such GOP support.
goal here is to increase the debt ceiling," Boehner told reporters. "No
one wants to default on our debt." However, the House speaker didn't
rule out trying to get something in return for such GOP support.
"Republicans
got burned by the government shutdown and decided to take that off the
table," said Thomas Mann, a scholar who studies Congress at the
Brookings Institution. Mann thinks the GOP will also back away this time
from digging in its heels on the debt ceiling and try to reach some
sort of deal on immigration. "But those battles are far from resolved."
got burned by the government shutdown and decided to take that off the
table," said Thomas Mann, a scholar who studies Congress at the
Brookings Institution. Mann thinks the GOP will also back away this time
from digging in its heels on the debt ceiling and try to reach some
sort of deal on immigration. "But those battles are far from resolved."
Standard
& Poor's called the October shutdown, which furloughed 800,000
federal workers, a $24 billion drag on the U.S. economy. The bipartisan
Congressional Budget Office estimates the shutdown, together with a
cutback in government spending and higher taxes that took effect last
year, subtracted 1.5 percentage points from last year's economic growth,
extending the nation's long crawl out of the deep 2007-2009 recession.
& Poor's called the October shutdown, which furloughed 800,000
federal workers, a $24 billion drag on the U.S. economy. The bipartisan
Congressional Budget Office estimates the shutdown, together with a
cutback in government spending and higher taxes that took effect last
year, subtracted 1.5 percentage points from last year's economic growth,
extending the nation's long crawl out of the deep 2007-2009 recession.
For
all of 2013, the economy expanded at a lackluster 1.9 percent pace,
even though the October-December quarter posted a respectable 3.2
percent increase in the gross domestic product.
all of 2013, the economy expanded at a lackluster 1.9 percent pace,
even though the October-December quarter posted a respectable 3.2
percent increase in the gross domestic product.
"The
single biggest impediment to a stronger economic recovery has been the
years of dysfunction in Washington and the policies that have emerged,"
suggests Steven Rattner, a longtime Wall Street executive who was
Obama's auto-bailout adviser in his first term.
single biggest impediment to a stronger economic recovery has been the
years of dysfunction in Washington and the policies that have emerged,"
suggests Steven Rattner, a longtime Wall Street executive who was
Obama's auto-bailout adviser in his first term.
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