The Economy and the Impasse in Debt Talks

The Economy and the Impasse in Debt Talks

Republicans want President Obama to take tax hikes off the table. Democrats want revenue increases as well as spending cuts. What the ongoing impasse in negotiations over reducing the debt means for the struggling U.S. economy.

The White House says Congress must raise the government’s borrowing limit by August 2, or it will run out of cash to pay its bills. In mid-May, the Treasury Department employed extraordinary measures to extend the deadline. Now economists warn of another financial crisis and recession if the ceiling is not lifted. But many lawmakers are demanding an agreement to reduce the federal budget deficit in return. Last week, talks led by Vice President biden on how to make those cuts broke down. Today, he and the President meet with the Senate’s Republican and Democratic leaders in a bid to break the deadlock. We discuss what’s at stake for the struggling U.S.economy.

Guests

Jared Bernstein

senior fellow, Center on Budget and Policy Priorities, and former chief economist and economic policy adviser for Vice President Joe Biden.

Kevin Hassett

director of economic policy studies, American Enterprise Institute.

Janet Hook

congressional correspondent, The Wall Street Journal.

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