By Russell Berman - 09/11/12 11:45 PM EDT
House Speaker John Boehner (R-Ohio) on Tuesday said he was “not confident at all” that Congress and the White House could strike a major debt deal, hours after Moody’s threatened a credit downgrade next year absent an agreement.
Boehner voiced his continued frustration that the Senate has not acted to avert both steep spending cuts and tax increases set to take effect in 2013. The cuts to defense were put in place in 2011 to spur action on a far-reaching fiscal plan.
At a press conference in the Capitol, the Speaker was asked if he was confident the U.S. could avoid that fate.
“I’m not confident at all,” he replied. “The House has done its job, both on the sequester and on the looming tax hikes that’ll cost our economy 700,000 jobs.
The Senate at some point has to act. On both of these, where’s the president? Where’s the leadership? Absent without leave.”
Before leaving for its annual August recess, the House approved an extension of the full slate of George W. Bush-era tax rates. The Democratic-led Senate passed a measure extending the rates only on annual income up to $250,000 — consistent with President Obama’s position.
Earlier in the year, the House also passed legislation replacing the triggered cuts with other reductions in discretionary and mandatory spending. The Senate has not acted on that bill. This month the House plans to pass another measure that instructs the president to detail his own plan for replacing the scheduled cuts.
It was not clear whether Boehner was expressing his pessimism about a deal before the end of this year or next. The Moody’s warning specifies that it expects action by the end of 2013, not necessarily before the end of 2012.
There is a growing consensus that while Congress could take limited action in a lame-duck session after the November election, a far-reaching accord will wait until a new Congress and a new administration are sworn in next year.
And before lawmakers get to a major deficit-reduction package, their first priority is to stave off the across-the-board cuts and tax increases that are scheduled to take effect. Indeed, if Congress takes no action on the so-called “fiscal cliff,” the deficit and debt picture would brighten considerably. But economists have warned that the short-term impact of the combination on the economy could send the country back into recession.
Complicating matters is the short window of time between the election and the end of the year, along with concerns that some lawmakers who have just been voted out of office would be deciding federal fiscal policy for years to come. Officials have thus been floating the idea that Congress would act in a lame-duck session to replace the sequestered cuts and halt the tax increases for a few months or up to a year, to provide more time for a grand bargain to be negotiated.
“I don’t see how you would solve the overall sequestration in the short term,” House Majority Whip Kevin McCarthy (R-Calif.) told reporters Monday.
Boehner issued a written statement on the Moody’s warning after his press conference, saying it “underscores the point we have been making all year: The threat to American jobs comes not from action on our debt, but from inaction on our debt.”
Still, it was Boehner’s unscripted comment that drew a round of criticism from Democrats.
“I was disappointed when my friend John Boehner said today that he has no confidence on a budget deal,” Senate Majority Leader Harry Reid (D-Nev.) told reporters. “I think we have to look at the glass being half-full and not half-empty all the time. I’m confident that we will reach some kind of arrangement.
“It’s much, much too early to give up,” Reid added. “I’m not going to give up.”
House Minority Leader Nancy Pelosi (D-Calif.) issued a statement saying Boehner’s lack of determination to reach an agreement is due to his party’s “intransigence and partisan obstructionism.”
She also criticized the GOP majority for holding the House in session for just eight days in September and October.
“The ball is in Speaker Boehner’s court,” Pelosi said. “Instead of going out for seven weeks, we call upon Speaker Boehner to work with Democrats across the aisle to restore fiscal responsibility with a balanced approach, create jobs, return fairness to our economy and strengthen the middle class.”
— Alexander Bolton and Peter Schroeder contributed.
This story was posted at 1:53 p.m. and updated at 7:45 p.m.