The federal reserve offered a bleak assessment of the U.S. economy today, and that, combined with Standard & Poors' downgrade of the U.S.'s credit rating last week has prompted some to call for Congress to return from August recess for an emergency session. WAMU's Pat Brogan talks with Alex Bolton, senior staff writer from The Hill, about how effective that would be.
House Republicans, notably 2012 presidential candidate Michele Bachmann, have called on Congress to come back and work out a plan that will ensure that the government doesn't default on its debt in 2013, when the current deal runs out.
Bachmann said that if she were the president she would call Congress back to work out a plan that would ensure U.S. creditors that they would be paid after 2013 and that social security recipients and members of the military would continue to be paid.
Such a plan could assuage fears from creditors, Bolton says, but at this point, with 2013 more than a year away, "there's really not a lot of urgency to do that."
In terms of other measures to counteract the falling markets, Bolton sees little likelihood of progress. "The problem is that there isn't much Congress can do," he says. "Democrats think the most reasonable way to boost the economy is to do another stimulus, and that's not just politically feasible in this Congress."
"I think that's one of the reasons the markets are so pessimistic right now," Bolton adds.
Advisers to President Obama have indicated it's unlikely he'll call for Congress to return. "The thinking is that Congress is probably more likely to be cooperative after they've had a little time to be away from each other," Bolton says. "Bringing them back into the partisan environment of Washington is probably not the the best solution."
The ongoing difficulty of reaching an agreement on the government's finances is largely what led Standard & Poors to downgrade the U.S.'s credit rating Aug. 5, and that should create pressure on members for when they return, Bolton says.
"This message from Standard & Poors gives Democrats and Republicans strong incentive to cooperate," Bolton says. "But whether that will happen appears doubtful. If anything, things have gotten more partisan as the election nears."