A standoff between the Obama administration and emboldened Republicans will probably block any new help for an economy squeezed by slow growth and high unemployment. Congress might also create paralyzing uncertainty for investors and businesses by fighting over taxes, deficits, health care and financial regulation.
“We expect massive gridlock and little cooperation,” writes Brian Gardner, Washington analyst for the financial firm Keefe, Bruyette & Woods.
If times were good, gridlock wouldn’t matter so much. A Republican Congress and Democratic White House butted heads in the mid- and late ’90s, after all, and their sparring did nothing to derail a strong economy. But now, nearly a year and a half after the official end of the Great Recession, the economy still isn’t growing fast enough to bring down unemployment, which is stuck at 9.6 percent. Likely Gridlock in Congress Could Threaten Economy