It's going to be a long weekend in Washington, and there better be some clarity by the time most of us return to work on Monday. The crisis over raising the debt ceiling has been created by Republican tea party extremists in the House who care more about rigid ideology than their constituents or the nation's ability to pay its bills. There is no excuse for missing Tuesday's midnight deadline to raise the federal debt ceiling, and more responsible Democrats and Republicans should come together quickly to avoid driving the economy into a deeper ditch.
It's hard to predict the full extent of the fallout if Congress fails to act responsibly, but this is not some esoteric discussion. The federal government would have to immediately prioritize its spending as the money ran out, likely triggering all sorts of hardships. Federal student loans could be up in the air. Interest rates could wind up rising on car loans, mortgages and credit cards. Workers could see their 401(k) accounts decline as the stock markets continue to slide amid the uncertainty. Some conservatives are skeptical about such predictions, but there is no reason to risk inflicting more economic hardship on Americans.
Here is one concrete result already of Congress' failure to lead: Hillsborough County's credit rating is under review and could be downgraded by Moody's Investors Service. Moody's reasons that since the federal government's bond rating could be downgraded because of the debt crisis, local governments that rely heavily on federal spending (MacDill Air Force Base is in Tampa, for example) should be examined. Hillsborough already is cutting $50 million in county spending. If the county's credit rating were downgraded, borrowing costs would be higher and that could require further cuts in spending to make up the difference.
Yet the House and Senate continue down separate paths. House Speaker John Boehner, his leadership severely weakened by the upstart tea party sympathizers, finally pushed through an unworkable two-step plan Friday that the Senate won't accept and President Barack Obama would veto. Senate Majority Leader Harry Reid laid the groundwork for a slightly more palatable approach with votes scheduled for early Sunday. Democrats have given up on raising new revenue along with spending cuts, yet conservative House Republicans keep insisting on unacceptable add-ons such as a balanced budget amendment. At a minimum, the president and the Senate should demand that any solution not require going through a similar showdown before the 2012 elections.
Back in the real world, the stock market completed its worst week of the year Friday as the Dow dropped for the sixth consecutive day. The Commerce Department reported that economic growth for the first six months of 2011 was the weakest in two years. And Tampa Bay residents do not need a government report to know that wages are stagnant, home values are still declining and jobs remain scarce.
The best way to revive the economy and lower the federal deficit is to create more jobs. The quicker Congress resolves this needless stalemate over the debt ceiling and focuses on what Americans are most concerned about, the better.