U.S. Congress' Critical Role in the Economy

Blame Congress, Not the President, for the Economy

U.S. Capitol Building
U.S. Capitol Building. Getty Images

Definition: The U.S. Congress is the Legislative Branch of the federal government. It has two bodies. The Senate has two elected officials from each state. The House of Representatives' membership is based on each state's population. 

Since the First Congress, which met from 1789 to 1791, all Congresses have been numbered in order. The session usually lasts from January 3rd to July 31st, but in special cases, it can last longer.

Every other November, voters elect all 435 Representatives and a third of the Senators. The newly-elected Congressmen don't take office until January. The time between those two dates is known as the Lame Duck Session. The members who weren't re-elected have less political power. That's because they're leaving in a few weeks. As a result, nothing often gets done.  

Congress has five support services.The Government Printing Office (GPO) prepares all public documents. The Library of Congress catalogs them. The Architect of the Capitol maintains the building that houses Congress.

The Congressional Budget Office (CBO) analyzes the President's annual budget. It also reviews large programs. These include Social Security, the Department of Defense and even the Navy's Shipbuilding Plan. It played a critical role in resolving the 2008 financial crisis by analyzing TARP and ARRA. These programs may never have gotten off the ground without CBOs respected analysis.

 CBO employs about 230 people, primarily economists and public policy analysts.

The General Accounting Office (GAO) advises Congress on wasteful government spending. That includes duplication and areas that could be more efficient. For example, the country may no longer need the Strategic Petroleum Reserve, thanks to shale oil production.

The GAO also identifies outright high-risk agencies and programs. For example, the Department of Veterans Affairs is expanding rapidly. That could create inefficiencies and duplication. 

The Joint Economic Committee is a permanent committee with ten Senators and ten Representatives. It advises Congress on the economy. It holds hearings to educate members on economic issues. It reviews the Economic Report of the President

What Are the Duties of Congress?

The primary duty of Congress is to write, debate, and pass bills. Private bills deal with individual matters. These include claims against the Federal Government, immigration and naturalization cases, and land titles. These bills become private laws if approved and signed.

Public bills deal with general questions. They become Public Laws, or Acts, if approved by Congress and signed by the President. That includes the Affordable Care Act.

Congress alone has the power to declare war. The President can start a war only in response to an attack.

 

Congress coins the U.S. dollar and other currency, but the U.S. Treasury prints it. The Federal Reserve expands the money supply through increased credit. For more, see Is the Federal Reserve Printing Money?

Congress supervises both the executive and judicial branches. The House can impeach a President. The Senate approves presidential appointments, treaties, and votes on House-sponsored impeachments. It establishes the federal courts and their jurisdictions.

Congress regulates interstate commerce and establishes immigration rules. It also holds hearings on critical national issues.

How It Affects the Economy

One critical way Congress affects the economy is the Federal budget. The President submits his or her request as part the normal budget process. He or she bases it on departmental requests and petitions. Congress then appropriates funds to each department. It can use the President's budget as a guide, or ignore it.  If Congress doesn't approve a budget, the government will shut down. That occurred in 2013 and 1995.

Congress is also in charge of setting the debt ceiling. If the ceiling isn't raised, the United States must default on its debt payments. Congress delayed raising it in 2011, setting off a crisis. Standard &Poor's lowered its outlook on U.S. debt, sending the Dow down 200 points. 

In 2000, Congress passed the Bush tax cuts. They were due to expire in December 2012. Members disagreed on whether it should expire. That led to the fiscal cliff in 2012

Congress frames foreign policy and trade. It gives the President trade promotion authority to negotiate trade agreements. It then votes yes or no on these agreements. These include NAFTA, the Trans-Pacific Partnership, and the Transatlantic Trade Investment Partnership. It also votes on regional and bilateral agreements. 

Individual Congressmen affect the economy. Former U.S. Representative Barney Frank was chair of the Housing Financial Services Committee. He investigated banking practices that led to the 2008 financial crisis. He also co-sponsored the Dodd-Frank Wall Street Reform Act

Congress constantly adds new laws that affect you in all kinds of ways. Find out more about U.S. House of Representatives or the U.S. Senate

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