The Committee for a Responsible Federal Budget valiantly continues to make the case for “going big” in the fiscal negotiations. I fear their argument is falling on deaf ears: the window for a fiscal bargain–grand, bland or otherwise–that deals with our long-term fiscal challenge is closing. The upcoming sequester battle provides one last opportunity to make such a deal. Yet both Republicans and Democrats say that they are prepared to allow the sequester to take effect on March 1, at least for a while, and they seem to mean it. A deal that addresses longer term debt sustainability and at least partly restores the sequester cuts remains possible, though unlikely, as part of the continuing resolution (CR) to fund the government from March 28. That’s the real deadline.
The International Monetary Fund (IMF) has again downgraded its outlook, reducing its forecast for global growth by 0.1 percentage points to 3.5 percent this year and 4.1 percent next year. For Europe, in particular, there is not much good news: Read more »