Norton Sees Continued Deadlock Unless Independent Non-Political Institutions Speak Up for Compromise

August 7, 2011

WASHINGTON, DC -- Congresswoman Eleanor Holmes Norton (D-DC) said today that "Congress must accept the verdict from the market, which took a deep plunge immediately following the deficit deal, and from the Standard & Poor's (S&P) downgrade, both based more on the political dysfunction of the Congress than on the deficit itself." The criticism now coming from analysts is that the budget deal failed on both essentials: its cuts were too meager and its attention to economic growth was zero. S&P found missing not only entitlement reform, but also near-term steps to bolster economic growth, which should give the administration some comfort because of its spurned offer of a grand $4 trillion bargain that would have exchanged entitlement reform for revenue to help tackle the deficit. However, S&P's principle indictment was of Congress and its "political brinksmanship" for a loss of confidence that such a bargain can be successfully reached. The reduction in government spending already has become a drag on the economy as the private sector struggles alone and grew jobs by 117,000 last month, while government dropped 37,000 jobs. Private sector, particularly healthcare, manufacturing and retail picked up last month, but withdrawal of federal, state, and local government spending has become a factor in the calculation of analysts that the U.S. may be headed for a double-dip recession.

Norton said that she was "bewildered by the timidity of Federal Reserve Chairman Ben Bernanke, the president's deficit reduction commission, and, for that matter, the rating agencies for their timidity during the long congressional deficit reduction wrangling in calling for political consensus that would have reinforced the $4 trillion compromise that S&P says is necessary. Instead, when House Speaker John Boehner (R-OH) walked away from the $4 trillion deal, the president was left alone in calling for a consensus that many now concede is necessary. The president's call for balance is now belatedly reinforced by the postpartum analysis of experts."

However, Norton warned, "The winner-take-all, cuts-only approach led by Tea Party Republicans was too decisive a victory to hope that Republicans will respond to either the market plunge or the market downgrade. They are already promising that their appointees to the upcoming commission designated to find an additional $1.2 billion in deficit reduction will be pledged to oppose any new revenue, virtually guaranteeing by December a repeat of the same process that has disgusted the American people. Unless responsible non-political entities step up, speak out, and cease taking the easy way out of casting stones at both sides, Republicans will continue to take their no taxes pledge more seriously than the obligation of every public official to compromise, particularly when the economy is at stake."