Friday’s dismal jobs report and the worst stock market dip since 2008 raises the question: Just how bad does the economic climate need to get to trigger some policy consensus in Washington on how to make it better?
The widening gap between the two parties' economic visions and the deep divisions in their politics offer little insight or encouragement that Washington will finally pivot to jobs and economic growth in September when Congress returns.
And if there is one precedent that this Congress has established, it’s that the Republican House and the Democratic Senate come together to act only under white-hot pressure such as the threat of default or a government shutdown. At this rate, the answer may be: much, much worse.
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The divisions were underscored on Friday in the wake of another stagnant jobs report and a 9.1% unemployment rate, while the markets continued to rattle amid economic worries about long-term global stability.
In response to the jobs report, House Speaker John Boehner, R-Ohio, laid out his ideas for economic growth and job creation that read like a list of non-negotiables for Democrats: Expand domestic drilling for oil and gas reserves, repeal President Obama’s health care law, enact a balanced-budget amendment, cut taxes, and reduce regulations on businesses.
“Today’s unemployment report is more proof that all of the Washington spending, taxing, and regulating is devastating our economy,” he said.
Rep. Sam Graves, R-Mo., chairman of the Small Business Committee, further argued for lowering the corporate tax rate to 25 percent and passing three stalled trade pacts with South Korea, Panama, and Colombia as part of the GOP's economic vision.
Across the Capitol, Senate Majority Leader Harry Reid, D-Nev., holds a far different view. Reid, like most Democrats, is calling for greater investments (GOP: read "spending") in clean-energy initiatives and infrastructure. But congressional Republicans have all but ruled out such measures, arguing that extensive government spending, such as the stimulus package, failed to produce the kind of job creation that was promised.
Reid also accused Republicans of putting the tea party's concerns ahead of the economy. "But to accomplish these [job-creation] goals, we need Republicans to stop using commonsense jobs bills as vehicles for the tea party’s ideological agenda and forcing us to run the government from one manufactured crisis to the next,” he said, referring to the debt-ceiling battle that consumed Washington for most of the summer.
It’s no surprise that the heat coming out of Washington is being mirrored back in Americans’ view of Congress. The latest New York Times/CBS poll, out Thursday, gave Congress a record disapproval rating of 84 percent. More troubling to incumbents, however, is the poll's finding that three of four Americans, 75 percent, said that most members of Congress don’t deserve reelection.
Whether Congress can work together on jobs might rely on how seriously lawmakers think their reelections rely on it. So far, Republicans have resisted efforts to cut deals with the White House on economic matters because they believe he has ownership of the economy and will be the one judged for it in 2012. But if those dynamics shift and the public continues to spread the blame across Washington, mutual disgust may be the surest way to get the two parties to work together this fall.
They will face an immediate test with the new Joint Select Committee on Deficit Reduction. Although the panel’s efforts aren’t necessarily in line with job creation, if the markets continue to rattle and jobs continue to stagnate, the task of improving the long-term U.S. fiscal outlook will take on even greater urgency.
“We have an anemic recovery so far, and all of these people—one-third of the Senate, and the whole House, and the president are up for reelection, and there may be urgency on everyone’s part to do something and try and get this economy moving in a stronger direction,” said Tom O’Donnell, chief of staff to then-House Majority Leader Dick Gephardt, D-Mo., and now a managing partner at Gephardt Government Affairs. “My sense is that the politics, where the economy’s at, this new law, it may drive them to try to work together even more soon.”
O’Donnell is an optimist, but for anyone looking to Congress today for progress on job creation, there is far more evidence in support of pessimism.
Scott Bland contributed