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U.S. Debt Crisis U.S. Sen. John Kerry makes a statement to the media upon the failure of the supercommittee in November.
Ask not what your country can do for you, ask what you can do for your country.
If President John F. Kennedy posed that question to members of the 112th U.S. Congress, the answer would have been a simple "nothing."
Gridlock in Congress is not a new development. But what U.S. citizens saw this year from Congress can never be explained away, especially when the coveted triple-A rating on U.S. debt was stripped away by one major credit ratings agency as two others threatened similar downgrades.
The major issue in Congress this year was the weighing of tax increases against spending cuts as the country's deficit climbed, an argument that went right down party lines.
With the threat of a U.S. default rising against concern over the ballooning debt levels, Democrats and Republicans took their debate over a debt-ceiling increase all the way to the Aug. 2 deadline, which is when the Treasury estimated its borrowing ability would have been depleted.
Even though an agreement was ultimately forged at the eleventh hour, the brinkmanship in Congress resulted in a
downgrade of U.S. debt by
Standard & Poor's, the first time the U.S. has lost a prestigious triple-A rating in history.
This move triggered a
steep slide in U.S. equities and resulted in
incredible volatility through the rest of the summer and well into the fall. Swings of 3% on the
Dow Jones Industrial Average and the
S&P 500 become the norm, not the exception.
The debt-ceiling debate and subsequent downgrade by S&P is just one instance this year where Congress' ineptitude disillusioned nearly every U.S. citizen and injected major volatility into financial markets. It began in January with a disagreement over the reading of a modified version of the U.S. Constitution. By April, there was a real possibility of a government shutdown and 800,000 furloughed government employees as the two sides bickered.
The bickering didn't end with the debt-ceiling debacle, however. In the aftermath, a 12-member committee was formed as part of the August budget control act. The so-called Super Committee was tasked with finding $1.5 trillion in deficit reductions to be made over a 10-year period -- and despite roughly two months to complete the job, failed. And even though $1.2 trillion in automatic cuts were triggered by the committee's failure, some congressional members are now trying to backtrack on that.
And it continues. In November,
60 Minutes aired a report on stock trading by congressional members that may have run afoul of insider trading laws. A bill drafted to put an end to insider trading in Congress was hyped up but stalled in the House.
Before the year could end, though, we saw more drama from Congress as the House and Senate went head-to-head over extending the payroll tax breaks. Eventually, the House relented on its demand to have the cuts extend for a year, but not before America once again groaned over the collective failure on Capitol Hill.
As a result of the congressional mess and heightened volatility in financial markets, a
CBS News poll in November found that Congress' approval rating dropped into the single digits. At 9%, it was an all-time low rating for the members of government. For a little context, during the Gulf oil spill in 2010, reviled oil giant
BP(BP) had an approval rating of 16%. During the Watergate scandal, Richard Nixon's approval rating at its lowest was still above 20%.
-- Robert Holmes