Australian Treasurer Wayne Swan said “cranks and crazies” in the U.S. Republican Party are threatening economic growth as Congress remains deadlocked on tax increases and spending cuts set to take effect in January.
“Let’s be blunt and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican Party,” Swan said in a speech in Sydney today. “Global markets are nervously watching the positioning of hardline elements of the Republican Party for signs that they will dangerously block reasonable attempts at compromise.”
U.S. lawmakers are deadlocked over how to resolve the so- called fiscal cliff, the combination of more than $600 billion in automatic tax increases and spending cuts that will go into effect next year if Congress does nothing. Ben S. Bernanke, the chairman of the Federal Reserve, has said the issue is one of the main sources of risk for the U.S. economy.
Republicans led by the anti-tax Tea Party movement wrested control of the U.S. House of Representatives from Democrats in the 2010 mid-term election, picking up 63 seats for their biggest gain in 72 years. The movement’s clout was evident in primary races earlier this year in Indiana and Texas, where establishment-backed Republican officials were defeated by candidates eschewing political compromise.
“With the world watching, it is imperative that the U.S. Congress resolve an agreement to support growth in the short term,” said Swan, who is also deputy prime minister.