WASHINGTON -- House Speaker John Boehner (R-Ohio) said he is "not confident at all" that Congress can deal with the nation's debt problems and avoid a credit downgrade, an unsettling prospect that could mean a massive stock market plunge.
During a Tuesday gathering with reporters, Boehner said the House of Representatives has already passed bills that address the nation's two most pressing fiscal matters -- the $1.2 trillion sequester and the soon-to-expire Bush-era tax cuts -- and put the blame squarely on President Barack Obama for not doing more to foster bipartisan agreements on both fronts.
"On both of these, where's the president? Where's the leadership?" he asked. "Absent without leave."
A White House spokeswoman did not immediately respond to a request for comment.
Boehner's remarks come as Moody's Investor Services warned Tuesday that it likely would downgrade the nation's credit rating if Congress doesn't make progress in bringing down the national debt, currently at $16.1 trillion. The credit rating firm said talks between Congress and the White House on the 2013 budget, and whether they reduce the ratio of debt to gross domestic product, will be key to the U.S. keeping its top credit rating.
As an aside, Boehner said he still views last year's failed debt negotiations "as the biggest disappointment of my speakership."
The debt ceiling battle of July 2011, which nearly resulted in the U.S. defaulting on its credit for the first time in history, is back in the spotlight this week thanks to Bob Woodward's new book, "The Price of Politics." Woodward chronicles the agonizing, months-long negotiations between Obama and congressional leaders as they tried, but failed, to reach an agreement on raising the debt ceiling while also slashing trillions from the deficit.
Boehner cited Woodward's book -- a specific page of it, in fact -- as proof that Obama is the one to blame for the sequester, or the automatic, across-the-board cuts that are set to kick in at the end of the year.
"You know, you look at Mr. Woodward's book that came out this morning, page 326. It will make it perfectly clear where the sequester came from," Boehner said. "The president didn't want his reelection inconvenienced by another fight over a $1.2 trillion increase in the debt ceiling. That's why we have it."
The sequester was never intended to take effect; nobody likes it and Republicans in particular are upset that it applies to defense spending. But leaders in both parties signed off on it last year as a motivator to come up with a better way to cut trillions in spending by the end of this year. They even created a bipartisan "super committee" with lawmakers from both parties and both chambers to come up with trillions in cuts. They never succeeded, though, so now it appears the sequester could happen.
Despite no signs of progress on a debt deal, Boehner said he remains committed to bringing down spending. The reality is that any action on debt matters will likely take place after the November elections.
"Somehow, we have to deal with our spending problem," he said. "America continues to spend more money than what we bring in and we have to resolve it."
UPDATE: 3:10 p.m. -- House Minority Leader Nancy Pelosi (D-Calif.) pushed back on Boehner's claims that Obama is to blame for the gridlock on a debt deal. To the contrary, she said, House Republicans are the ones holding up the matter.
"With our nation inching closer to the 'fiscal cliff,' Speaker Boehner's lack of determination to reach an agreement is due to his party's intransigence and partisan obstructionism," she said in a statement.
Pelosi knocked Boehner for keeping the House in session for only eight days in September instead of devoting more time to finding a resolution to the fiscal matters.
"Democrats are committed to staying in session as long as it takes to ensure certainty for the middle class and growth for the economy," she said. "The ball is in Speaker Boehner's court."
Below, economic predictions that were either blatantly wrong or have blatantly yet to come true:
Back in 2010, Republican Vice Presidential candidate Paul Ryan explained that the Federal Reserves plan to purchase $600 billion worth of securities -- known as QE2 -- was little more than "sugar-high economics" that risked rising inflation and weakening the dollar. But instead the opposite took place. According to Bloomberg: "Since that prediction by Ryan, who has been chosen by presumptive Republican presidential nominee Mitt Romney to be his running mate, the dollar has risen against major currencies and inflation has stayed below the Fed's goal of 2 percent."
In early January of 2009, Christina Romer, economic adviser to then President-elect Barack Obama, made a prediction: massive government stimulus on the order that would eventually be passed by Congress would keep unemployment below 8 percent, reports The Washington Post. Without it, unemployment could reach as high as 9 percent. In July 2012, unemployment edged up to 8.3 percent. It has not gone below 8 percent since January 2009.
On March 18, 2010, Jim Kramer stated on Larry Kudlow's program that Obamacare would tank the stock market. The reform package was, in his words, "the single greatest impediment to the stock market going higher." On March 23 of that year, according to CBS News, President Obama signed health care reform into law. Following Yahoo's tracking of the Dow Jones, the market on April 1 2010 was at 10,927. On August 17, over two years later, the Dow Jones Industrial Average was pegged at 13,264. Granted, the market could still take a nose dive. But odds are it won't be because of health care reform.
In a radio interview Minnesota Congresswoman Michelle Bachmann gave with Bill Bennet in March of 2009, the Minnesotan claimed that Obama's policies were representing the "final leap into socialism," Think Progress reported. But alas, while Bachmann's sensational claim may have gotten her into the spotlight, the government has been engaged in selling its stake in the industries that it had to temporarily prop up. General Motors, an automaker that the U.S. government had to prop up with emergency capital, bought back all preferred shares held by the U.S. Treasury as of December 2010, reports The New York Times. Wall Street's largest banks that have frequently brought about wrath from liberals such as Paul Krugman, like Citi, Goldman Sachs and JP Morgan, are still privately run.
In early 2010, then-Fox News commentator Glenn Beck said that the U.S. was likely in for a "Great Depression Times 100," reports Media Matters, going on to say that the country would experience a period of hyperinflation. Unemployment during the Great Depression peaked at around 25 percent, according to an article published by the Bureau of Labor Statistics. But even at the worst moments of the Great Recession, unemployment only reached slightly above 10 percent. Presently, it is at 8.3 percent, according to the Bureau of Labor Statistics. With inflation estimated to remain stagnant at 1.5 percent through 2012, the nightmare warnings of hyperinflation expounded by Beck as well as by renowned "economist" Peter Schiff appears to be just that. A nightmare.
In October of 2009, CNBC analyst and Tea Party founder Rick Santelli told said on the show Fast Money that he believed "stagflation is almost a certainty." In other words Santelli was predicting that America would go through a period of high inflation and high unemployment. The only question he had was when. In November of that year, the Bureau of Labor Statistics revealed that between October 2008 and October 2009, prices rose by 1.7 percent not including food and gas. This made, at the time, Santelli's claim even bolder. Even though unemployment is still high -- almost three years later -- inflation has risen far below the Federal Reserves 2 percent annual target, Bloomberg reports.
Among the many predictions conservative radio host Rush Limbaugh has made over the years, the one he made on March 8, 2010 was not one of his best. On his daily radio show The Rush Limbaugh Show, Limbaugh announced to his listeners that healthcare reform, which would be signed into law later that month, would end up leaving 250 million Americans uninsured, Media Matters reported. As of June 2012, 49.9 million Americans do not have health insurance, CNN estimated.
In the June 13, 2011 Republican Presidential Debate, Mitt Romney, when asked about the consequences of not raising the debt limit answered the moderator's question with a question. "Well, what happens if we continue to spend time and time again, year and year again more money than we take in?" As Asher Smith pointed out on The Huffington Post, this can only mean that the U.S. will eventually be unable to pay off its obligations and, as a result, default. Bit as of August 2012, close to one year after the debt ceiling was raised, the U.S. still hasn't defaulted.
In March of 2011, PIMCO Co-Founder Bill Gross predicted an imminent spike in treasury bond yields following the end of the Federal Reserve's Quantitative Easing program, Fortune's Colin Barr reported. Bond yields, Gross told reporters, were likely to go "higher maybe even much higher" at the end of June 2011 when QE2 ended. The 10-year treasury bond yield has since fallen. Since the 2011, 10-year bond rates have hovered between 2.5 and 1.5 percent, according to Bloomberg.
In February of 2009, Vice President Joe Biden predicted that the federal stimulus package being implemented by Barack Obama's administration would "literally drop kick us out of this recession," The Hill reported. "This [stimulus] is about getting this out and spent in 18 months to create 3.5 million jobs." Technically, the recession ended during the third fiscal quarter of 2009, according to the Bureau of Economic Analysis. But with unemployment hovering around over 8 percent for the last three years, some economists are no longer talking about calling the current economic period a recovery. Brad DeLong, an economist with UC Berkley, told readers on his blog in 2011 that we're now in the midst of a "Little Depression" instead.
Economist Peter Schiff stated that the Federal Reserves monetary policies would lead to 20 percent inflation within one year. The statement, made in October 2008 on Glenn Beck's former CNN program, was proven wrong. During 2009, the U.S. actually experience deflation.
Congressman Ron Paul believed that runaway inflation was "just horrendous" in May 2011, he said during an appearance on Fox Business News. When Congressman Paul made that statement, inflation was pegged at 3.2 percent and, after peaking at 3.9 percent that October, inflation has steadily fallen to 1.4 percent in July 2012.