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The Economy: A Balancing Act on Capital Hill

Published on: June 20th 2009 16:35:20

Support for the Administration’s handling of the economy has, according to current polling data, , slipped to 55% approving and 42% disapproving with opposition among Republicans hardening.  More significantly, there are signs of centerist Democrats swaying towards resistance as well. With a new request from the White House for an acceleration in the rate of the economic-stimulus effort, the Administration faces even more increased resistance from Congressional Republicans, as was evident last week, when Speaker Pelosi had to withdraw an appropriations bill for war expenditures because it also included funding for the IMF. Tensions are quickly escalating on Capital Hill. At the beginning of the year, we identified the emerging points of contention between the White House and Congress as one of our drivers for the course of US policy in 2009. This is now starting to manifest itself in the economic debate. With the Administration focused on a sophisticated strategy for achieving health care reform, Congress and the White House will descend into ‘labyrinthine politics’. The sense within the Congress, on both sides of the aisle is that the Administration is overspending if not overreaching.  Obama remains popular and we suspect that with sufficient moderation and change, he will get mo st of the legislation he wants; however, the Administration’s programs for health care and energy, are going to face stiff resistance. Both ends of Pennsylvania Avenue know the government is out of money.

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