CBO says recession possible if Congress fails to resolve budget impasse

The Congressional Budget Office reported Tuesday that the nation's economy could fall back into a recession if President Barack Obama and Congress fail to come to terms on tax and spending issues. However, Democratic and Republican leaders appeared unwavering in their positions.

The New York Times: Recession Possible If Impasses Persists, Budget Office Says
The economy could relapse into a recession if President Obama and Congress remain at an impasse and allow several big tax increases and spending cuts to take effect at the start of 2013, the Congressional Budget Office reported on Tuesday. … Among the changes that will take effect if the White House and Congress do not act: … Reimbursements to doctors who treat Medicare patients will be cut significantly, taxes will increase for wealthy taxpayers to help pay for health insurance for more Americans and temporary business tax cuts, part of stimulus measures, will expire (Calmes, 5/22).

The Associated Press: Top Senate Dem To GOP: No Tax Cuts For Rich
Republicans will have to drop their insistence on retaining tax cuts for the rich and plans to reshape Medicare before there can be a bipartisan deal on controlling federal deficits and averting a wide-scale tax increase in January, the Senate's top Democrat said. In a letter to GOP senators released Tuesday, Senate Majority Leader Harry Reid blamed congressional Republicans' "strict adherence to tea party ideology" for the two sides' failure to reach such a deal (Fram, 5/22).

Politico: Paul Ryan: I Expect Mandate For GOP
House Budget Committee Chairman Paul Ryan predicted Tuesday that November's elections could bring a broad mandate for the Republican Party to enact aggressive reforms to the nation's finances. … Ryan said he and the Republican Party would "welcome" a debate with Obama on Medicare and taxes – believing that the GOP has an upper hand on the issue. In a question-and-answer session after his speech, Ryan said House Republicans will bring tax legislation to the floor in about a month that would extend the current rates for another year. That's intended to give lawmakers time to work through complicated budget and tax issues, instead of squeezing them in a lame-duck session (Kim, 5/22).