By Meghashyam Mali - 07/31/11 02:15 PM EDT
White House economic advisor Gene
Sperling dismissed fears that the US could face another
recessionary slump on Sunday.
He was "not worried the US will have a double-dip recession,” he said on Fox News Sunday.
Sperling also said “serious discussions” were underway on efforts to reach a deal to reduce the deficit and raise the debt-ceiling by an Aug. 2 deadline.
He sounded a note of optimism about prospects. “If there’s a will there are multiple ways to get there,” he said. But he also stressed that “important details need to be worked out.”
In his comments, Sperling said the White House was committed to seeing three basic conditions in the final agreement: a “down payment on deficit reduction,” tax reform and an “action forcing event” or “enforcement mechanism” to compel lawmakers to make future spending cuts.
Those conditions mirror the terms of the proposal believed to be under discussion.
Earlier Sunday on CNN, Senate Minority Leader Mitch McConnell said both sides were close to a $3 trillion deficit-reduction package.
The package is expected to include spending cuts of about $1
trillion and set up a select bicameral committee to recommend a second
deficit-reduction package worth between $1.4 trillion and $1.8 trillion by
If Congress fails to approve the committee’s recommendations, cuts to Defense and Medicare would go into effect automatically, giving both parties added incentive to reach a later agreement.
While refusing to go into specifics. Sperling said the Treasury Department had a “contingency plan” to handle making payments in the event lawmakers and the White House cannot reach a deal.
Sperling added that the “uncertainly” from the prolonged debt-ceiling debate was a “self-inflicted wound” on the economic recovery but expressed optimism that a deal could be reached by the Aug. 2 deadline.
“It ain’t over ‘til it’s over,” Sperling said.
The Treasury Department forecasts that the US will be unable to pay all its bills beginning on Aug. 3 if lawmakers and the White House fail to reach a deal to raise the nation’s debt-ceiling.
Senate Majority Leader Harry Reid (D-Nev.) delayed a vote on his plan to raise the debt ceiling late Saturday to give President Obama and GOP leaders more time to strike an agreement.
In a symbolic vote, House Republicans resoundingly rejected a version of Reid’s debt plan in a 173-246 vote.