Lawmakers are putting economic recovery at risk

Although reform efforts are moving ahead, the nation's fragile rebound is being threatened by fiscal stimulus cuts.

Michael Hiltzik
LA Times
June 30, 2010

Reporting from Washington

Seldom has the policy conflict between recovery and reform been presented as starkly as in the last two weeks.

On the one hand, there is last week's congressional agreement on a historic reshaping of the financial regulatory system — which brings stronger consumer protections, sharper oversight of mega-banks and risk-oriented behavior, new constraints on mortgage terms and closer scrutiny of credit rating agencies and insurance companies.

On the other, there's the failure of Congress (thanks to the threat of a Republican filibuster in the Senate) to extend unemployment coverage for more than 1 million Americans and to provide about $24 billion in Medicaid assistance for state budgets. That places as many as 900,000 public- and private-sector jobs, not to mention crucial services for destitute residents, at risk.

Not helping matters was the noise coming from last weekend's G-20 summit of developed countries in Toronto about the need to cut fiscal deficits by 2013.

(More here.)