Evidence is mounting that the economy is taking a hit because Congress can't – or won't – deal with the 'fiscal cliff' looming at year's end. The fight on Capitol Hill last summer over the national debt limit also took an economic toll.
Congressional Budget Office Director Douglas Elmendorf, at a Monitor breakfast Wednesday, said the challenges Europe faces now are 'larger than ever' and weighing on the US stock market.
The CBO is forecasting a $1.1 trillion deficit in 2012, followed by several years of a much lower amount. But CBO officials know that's a fantasy, so it has prepared a more pessimistic outlook.
Another decade of these lower tax rates for the wealthiest 5 percent of Americans would cost the US Treasury around $2 trillion – more than the amount of deficit reduction (at least $1.2 trillion) the debt super committee must find.
The essence of the divide remains: Increase federal investment to stimulate job creation versus easing environmental and other regulatory restrictions that critics say can hinder job creation.
Top 1 percent cause massive income disparity: a Congressional Budget Office report found that income for the top 1 percent increased 275 percent since 1979, while it only increased 18 percent for other Americans.
Congress's super committee may have just days to act in order to meet its deadline and prevent $1.2 trillion in automatic cuts to defense and nondefense spending. So far, no plan has emerged.