tightening of fiscal policy and would probably lead to a recession early next year. megyn:ed henry live in north las vegas where the president just spoke. reporter: good to see you. the president just wrapping up this event at a high school, campaigning in this battleground state, but the grim news from washington as you note, the cbo also projecting that for the fourth year in a row the federal budget deficit will top $1 trillion. in terms of the fiscal cliff that is coming that they are warning could lead to a recession, that fiscal cliff is referring to the fact that congress, leaders in both parties, failed to get a deficit deal some months ago. we have these automatic cuts, spending cuts called sequestration, defense cuts, other cuts that are coming at the end of this year. in addition to that the white house noting in a statement today that they believe house republicans should pass an extension of the middle class bush tax rates, extend those, get that going. the republican re
said today in a statement, quote. 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. just one day after vice president biden declared the middle class is coming back. that from the romney camp. we also can t forget. it s not just about the presidential candidates. it s leaders in both parties. democrats and republicans from capitol hill who kicked the can down the road on super committee did. not get a deficit deal. that s why we are on the verge of this fiscal cliff where all of a sudden these massive spending cuts to defense and other programs are about to kick in, shep. shepard: ed, word today that the federal reserve may step in and do something. we don t really know what that something might be. how might that effect this election cycle? could have an important impact. the fed is meeting again in september. had we learned today newly released
that s a big deal. there is also plenty of ballistic missile did go around, leaders in both parties who failed to get a deficit deal a year ago, and, as a result, that is leading to what you mentioned, this fiscal cliff, where we will see likely the bush tax rates expiring at the end of the year, the automatic budget cuts coming in, and the so-called sequestration. and the head of the c.b.o. said we could be headed if a major economic calamity. take a listen. if allowed to occur, the sharp reductions in taxes and, rather, reduction in spending, and that will lead to a trimming of the deficit of $500 billion, a significant tightening you have policy and lead, possibly, to a recession next year. reporter: a recession, not something the white house wants to hear. here is the really bad news f they got a deal and have a deficit deal in the next few
it for a year. but he is not making open-ended commitments. so why is president clinton now saying oh, it s the plus who are at fault when in fact he has differences with president obama. well, that happens in all parties. i think it s also true in the republic side but i think what the pr heard the end of that tape, he said the republic embrace of austerity will do more to reduce employment, slow job growth, increase the deficit than what the democrats are proposing. that s what he said. the reason why last summer when we did that deficit deal, right? remember the debt ceiling debate that took place. we did all gdp estimates were lowered. the economy started to slow because if you take that if you contract the economy belearned this in britain and europe if you contract the economy less jobs less growth. the republicans are proposing a strategy less jobs, less growth, more debt. the democrats are proposing more jobs, more growth and less debt. that s what this election is going to b
it for a year. but he is not making open-ended commitments. so why is president clinton now saying oh, it s the plus who are at fault when in fact he has differences with president obama. well, that happens in all parties. i think it s also true in the republic side but i think what the president said if you heard the end of that tape, he said the republic embrace of austerity will do more to reduce employment, slow job growth, increase the deficit than what the democrats are proposing. that s what he said. the reason why last summer when we did that deficit deal, right? remember the debt ceiling debate that took place. we did all gdp estimates were lowered. the economy started to slow because if you take that if you contract the economy belearned this in britain and europe if you contract the economy less jobs less growth. the republicans are proposing a strategy less jobs, less growth, more debt. the democrats are proposing more jobs, more growth and less debt. that s what this ele