Analysis: In era of gridlock, Congress "created a monster"

WASHINGTON Wed Jan 2, 2013 6:03am GMT

The U.S. Capitol Building stands in Washington December 17, 2012. REUTERS/Joshua Roberts

The U.S. Capitol Building stands in Washington December 17, 2012.

Credit: Reuters/Joshua Roberts

WASHINGTON (Reuters) - Setting a looming deadline to avert self-created calamity has become a frequent device for the U.S. Congress to get things done in recent years. When all else fails, as it often does, it's supposed to frighten members into action.

That was the idea when Congress created the "fiscal cliff" in August, 2011 to resolve a partisan struggle, also with a deadline and also self-created, over raising the federal debt ceiling.

Catastrophic budget cuts, timed to coincide with the threat of hefty income tax increases, would finally produce big cuts in the soaring federal budget by December 31, 2012, or else.

It didn't work.

Congress scared everyone but Congress, which while cutting taxes for most and raising them for a few, made no pretense of trying to make any progress toward reducing the deficit.

"We created a monster," Democratic Representative Charles Rangel of New York said on the floor of the House of Representatives on Tuesday night just before a House vote averted most of the effects of the fiscal cliff.

"This fandango was an immense embarrassment," American Enterprise Institute scholar Norm Ornstein said in an interview with Reuters, calling it "cringeworthy."

And "the fact that we are going to have another disastrous confrontation over the debt limit in two months, with the radical right wing of the House Republicans determined to send us over the edge if they don't get their way, is actually frightening."

"This House could have done worse, by rejecting the plan" to avoid the cliff, he said, "but it has done nothing to challenge its record as at minimum the worst Congress in our lifetimes."

The next confrontation to which Ornstein referred is likely to start heating up in a matter of weeks in anticipation of the need to once again raise the borrowing limit for the government beyond the current level of about $16 trillion. The risk will be a default by the government.

'PSYCHOLOGICAL FALLOUT'

Republicans in Congress, many of whom acknowledged publicly that they took a beating from President Barack Obama in the contest over the cliff, are promising to pursue spending cuts with extra vigor as a condition for approving the debt ceiling increase in the Republican-controlled House.

Historically, each partisan grudge match over spending has tended to make the next one even more bitter.

Alice Rivlin, a former U.S. budget director and Brookings Institution budget expert, also worries about "psychological fallout" from the battle over the cliff that could spill over into the debt ceiling struggle as well as contribute to the global perception that when it comes to the economy, the U.S. can't govern itself.

"It's very bad for the economy," she said in an interview with Reuters, "and for our image in the world. We don't look like a country in charge of its own destiny. That's hard to quantify but it's bad."

"This is a Congress that can barely get its work done - especially when confronting the most important issues of the day," said Sarah Binder, a George Washington University expert on Congress.

"In many ways, public disgust with Congress is already baked in: the public's expectations are so low that it's hard for Congress to surprise us," she said in an interview with Reuters.

That wasn't the way Minority Leader Mitch McConnell - the chief architect of the cliff - expressed it on August 1, 2011 as he spoke on the Senate floor.

"It might have appeared to some as though their government wasn't working," he said, "but in fact the opposite was true. The push and pull Americans saw in Washington these past few weeks was not gridlock, it was the will of the people working itself out in a political system that was never meant to be pretty."

Republican Representative David Dreier of California expressed a similar sentiment Monday night as the House closed the loop on the plan McConnell designed.

"This is the greatest deliberative body known to man," he said.

(Editing by Eric Walsh)