President Obama to Address Financial Crisis on Friday - KTVN Channel 2 - Reno Tahoe News Weather, Video -

President Obama to Address Financial Crisis on Friday

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President Barack Obama will make his first postelection comments Friday about actions needed to avoid the so-called fiscal cliff that could plunge the economy back into recession.

The 'fiscal cliff' is the one-two punch of expiring Bush-era tax cuts and across-the-board spending cuts to the Pentagon and domestic programs that could total $800 billion next year.

Obama is expected to urge Congress to act.

In his address from the White House East Room, Obama is not expected to put forward a specific plan, but instead will call on lawmakers from both parties to work together to tackle the nation's fiscal problems.

The newly re-elected president and Congress face a Jan. 1 deadline to avoid a combination of tax increases and spending cuts that all sides agree would undermine the military and other basic government functions. 

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Congressional budget experts are offering a dire analysis of what would happen to the economy if the "fiscal cliff" of tax increases and spending cuts can't be averted.

The report from the Congressional Budget Office says the economy would go back into recession, with the jobless rate jumping to 9.1%, if the tax hikes and spending cuts are allowed to take effect in January.

But the analysis assumes a lengthy impasse that would leave those changes in effect for the entire year -- and many analysts think that's unlikely to happen.

The report says the tax and spending changes would cut the federal deficit by $503 billion through next September. But the adjustments also would cause the economy to shrink by 0.5% next year.

It estimates that if the tax cuts from the Bush era are extended, the nation's gross domestic product would grow by 2.2% next year. And it says that growth would be almost 3%, if President Barack Obama's two-percentage-point payroll tax cuts and current jobless benefits for the long-term unemployed are extended.

Obama and Congress are looking for ways to avert the changes, or at least ease possible damage from them. (AP)

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