Mon Jan 21, 2013, 10:29 PM
applegrove (71,558 posts)
"The Congressional GOP Has Smothered A More Rapid Economic Recovery"
The Congressional GOP Has Smothered A More Rapid Economic Recovery
by Josh Bivens and Andrew Fieldhouse at the Economic Policy Institute
Congressional Republicans have made it clear that they intend to use every bit of leverage they can to force cuts to domestic spending in the coming year. This leverage includes threats to not raise the statutory debt ceiling and/or force a federal government shutdown after March 27, when the standing appropriations continuing resolution (CR) expires. This, of course, would represent the long-promised repeat of the spring and summer of 2011, when congressional Republicans secured over $500 billion in domestic spending cuts in CR fights and another $2.1 trillion in spending cuts in exchange for incrementally raising the debt ceiling by an equivalent amount—better known as the Budget Control Act (BCA) of 2011.
The BCA cuts have already done damage, and will all-but-surely slow growth in the rest of 2013 as well. The various components of the BCA accounted for about one-third of the total fiscal drag exerted by the major components of the “fiscal cliff” that was facing Congress ahead of the lame duck budget deal. And the components of the BCA account for 48 percent of the remaining fiscal drag unaddressed by the deal—a drag that is poised to shave 1.0 percentage point from real GDP growth in 2013. House Republicans have voted to replace the Defense cuts contained within the sequester—again rapidly approaching, following its postponement to March—in it with deeper domestic spending cuts, leaving a drag of 0.8 percentage points from the BCA for 2013, all while threatening to use the debt ceiling and CR as leverage to get their way.
If this ideologically driven objective of deeply cutting spending is met, this will represent just one more way that the GOP Congress has managed to delay full recovery from the Great Recession. The evidence continues to pile up that that these spending cuts, forced on a still-depressed economy, can easily throw the nation back into an outright recession and prolong the nation’s economic misery.
Is this an overly harsh read on the motivations of GOP members of Congress? Not at all. Motivations aside—regardless of whether they deeply believe that their ideological goal of reducing government spending will help the economy or whether they think that a slowed economy will simply help their own electoral prospects—the facts are simply that congressional Republicans have consistently hamstrung efforts that a large consensus of economists agree would have provided crucial help in lowering American unemployment. Specifically, they have objectively weakened the American Recovery and Reinvestment Act (ARRA), repeatedly filibustered routine extensions of emergency unemployment benefits, blocked aid to state governments, filibustered infrastructure investment, used extreme legislative vehicles like refusing to follow precedent on the typically pro forma votes to raise the debt ceiling to extract more economically damaging government spending cuts, blocked passage of a majority of the American Jobs Act (AJA), demanded counterproductive offsets to fiscal stimulus, and attacked the Federal Reserve’s expansion of the monetary base and other policy responses intended to lower unemployment. What follows is an abbreviated chronology.
0 replies, 408 views