The Senate resumed consideration of S. 782, the bill reauthorizing the Economic Development Act. Roll call votes on amendments are possible today. Yesterday, cloture on Sen. Tom Coburn’s (R-OK) amendment to repeal an ethanol tax credit failed by a vote of 40-59. Also yesterday, the Senate voted 98-0 to confirm a U.S. district judge nominee for New Jersey, and confirmed another New Jersey district judge nominee by voice vote.
Yesterday, Speaker John Boehner (R-OH) sent a letter to President Barack Obama warning that the commander in chief may be in violation of the law if he refuses to ask Congress for that authorization. In his letter, Boehner noted that the President is just days away from violating the War Powers Resolution, which maintains that, without congressional authorization, the President can deploy U.S. military forces for 90 days. In his letter, Boehner demanded that Obama provide legal justification for the operation in Libya by Friday.
Last night on CNBC's The Kudlow Report, Republican Study Committee Chairman Jim Jordan made a strong case for using the debt limit as leverage to cut the deficit in half next year, cap spending as a percentage of GDP, and enact a Balanced Budget Amendment (Cut, Cap, and Balance): “We have to use the leverage associated with this debt ceiling vote to put the country on a path that makes sense, one that's actually sustainable. The fiscal path we're on will lead to a debt crisis. If we're going to just kick it down the road, you're going to see conservative members not support increasing the debt ceiling. We have to do bold, dramatic things – cut spending, cap spending, and we believe a Balance Budget Amendment to the Constitution.”
Rep. Brad Sherman (D-CA), who was also part of the interview, argued that the debt limit is not the time to "deal with spending." That's interesting...because back in 2004 he justified his vote AGAINST a debt limit increase by arguing that it's failure would force "a serious debate on fiscal policy." Back then, the national debt was $7.4 trillion. We must ask Rep. Sherman what changed during the last 7 years, other than our debt doubling in size.
Speaking on the Senate floor this morning, Senate Republican Leader Mitch McConnell said, “Over the past few weeks, Americans have gotten what seems like a daily dose of bad news about the state of the economy. Whether it’s more joblessness, threats from ratings agencies, the price of gasoline, goods and housing, or a slowdown in manufacturing, people are finding very little reason for optimism.”
Unfortunately, that trend has only continued this week. CNBC reported yesterday, “It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression. Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data. . . . ‘The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression,’ Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients. According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices. Moreover, Dales said prices likely have not completed their downturn.”
And The New York Times writes today, “In the latest sign that the economic recovery may have lost whatever modest oomph it had, more small businesses say that they are planning to shrink their payrolls than say they want to expand them. That is according to a new report released Tuesday by the National Federation of Independent Business, a trade group that regularly surveys its membership of small businesses across America. The federation’s report for May showed the worst hiring prospects in eight months. The finding provides a glimpse into the pessimism of the nation’s small firms as they put together their budgets for the coming season, and depicts a more gloomy outlook than other recent (if equally lackluster) economic indicators because this one is forward-looking.”
Leader McConnell expressed disappointment with the Obama administration’s response to the bad news. “Amid the onslaught of bad news last week, President Obama’s message was that we’d hit some bumps in the road and that people need to be patient in the face of what called economic ‘headwinds’. He even joked about the wildly mistaken predictions he and others at the White House made a couple years back about the job-creating potential of the Stimulus. Well, I don’t think the 14 million Americans who are looking for jobs right now and can’t find them find any of this very funny. I don’t think that the 23 percent of Americans who now owe more on their mortgages than their homes are worth are laughing about their predicament. I don’t think recent college graduates out there who are burdened with tens of thousands of dollars in student loan debt and who can’t find a job are amused that the Stimulus bill turned out to be a failure.”
And even NBC’s David Gregory reacted with incredulity when DNC Chairwoman Rep. Debbie Wasserman Schultz claimed on “Meet the Press” Sunday that “we were able to, under President Obama's leadership, turn this economy around.” Gregory replied, “Whoa, whoa, let me just stop you there. Clearly, the economy has not been turned around. I mean, you just saw those numbers. . . . Americans don't believe that's the case. . . . [N]obody believes that the pace of job creation is anything close to robust enough to lead to economic growth . . . even to match the economic growth projections that this administration's made.”
As Sen. McConnell added, “Americans are deeply troubled by the fact that an administration which claims to be concerned about creating jobs has spent the better part of the past two and a half years pushing policies that seem like they were designed to destroy them. . . . Americans don’t have infinite patience. They don’t want to be told to just wait a little longer when all the evidence shows that their circumstances and their prospects are only getting worse. They want a change in direction.”
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