The Hill
Nation’s job-market recovery rests in lawmakers’ hands
By Vicki Needham
01/06/13  

A robust labor market recovery this year is dependent on Congress and the White House successfully resolving major budget issues within the next couple months. 

Economists and business groups say the job market, which continued improving during months of tense talks over the so-called "fiscal cliff," faces a jolt if policymakers can't clear a looming trio of budgetary hurdles. 

Concern is heightening around the risk to the economy of failing to reach an agreement on a debt-limit increase, paying for the remaining $85 billion in the sequester and ironing out a stopgap measure that will keep the government running after March. 

"I think we really are playing with dynamite with the debt ceiling," Alan Krueger, chairman of the White House Council of Economic Advisers said during an interview on MSNBC. 

"Just go back to August 2011, we saw confidence plunge when Congress played Russian roulette with the debt ceiling," he said. 

"We saw job growth grind to almost a halt. So the economy will certainly do better if Congress does what it normally does, which is raise the debt ceiling without drama." 

The economy added 155,000 jobs in December, roughly the average for monthly gains made in the past two years, reflecting an uncanny ability to hang tough despite those tax and spending cut headwinds. 

Now the jobs market and employers face their next challenge. 

"I don't expect an improvement in the job market until after Washington settles on what spending cuts and tax reform will be done, if any, and raises the Treasury debt ceiling," said Mark Zandi, chief economist for Moody's Analytics. 

"The uncertainty created by the coming political battles will continue to limit any gains in the job market or economy. 

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