The latest projections from the Congressional Budget Office reiterating its view that the looming “fiscal cliff” will lead to a recession next year had both parties again blaming each other for failing to act to prevent it — and gave the GOP a chance to shift some attention back to the economy after three days of intraparty wrangling over Rep. Todd Akin’s (R-Mo.) rape remarks.
The CBO projected that unemployment would rise to 9.1 percent next year even as the deficit plunged to $641 billion if all of the tax hikes and spending cuts happen on schedule. The deficit is projected to hit $1.1 trillion this fiscal year. Triggering the fiscal cliff, however, nearly leads to a balanced budget by 2018, when the deficit would be just $79 billion.
Neither party, of course, wants the fiscal cliff on policy grounds; Democrats, however, hope to use it as leverage to get the GOP to agree to tax increases on the wealthy.
White House Press Secretary Jay Carney called on the GOP to comply.
“They’re willing to hold the middle class hostage unless we also give massive new tax cuts to millionaires and billionaires — tax cuts we can’t afford that would do nothing to strengthen the economy,” he said.
“Congress also needs to act right now to prevent arbitrary spending cuts that would hurt military families, seniors on Medicare, and children who deserve a quality education. It’s time to replace these cuts with balanced deficit reduction that asks the wealthiest Americans and largest corporations to go back to the tax rates they were paying under Bill Clinton — back when our economy created 23 million new jobs and a record surplus,” Carney urged.
Speaker John Boehner’s office, however, put out a press release titled “Are Democrats Still Willing to Tank Our Economy in Pursuit of Tax Hikes?”
“Instead of threatening to drive us off the fiscal cliff and tank our economy in their quest for higher taxes, I would urge President Obama and congressional Democrats to work with us to stop the coming tax hike that threatens our economy and replace the looming defense cuts with common sense reforms,” Boehner said in a separate statement.
And the Romney campaign also keyed off the report.
“Today’s CBO report is another indictment of President Obama’s economic policies that have resulted in overspending, increasing debt, and a growing financial burden on the next generation,” Romney spokeswoman Amanda Henneberg said.