Democrats, Republicans release separate debt reduction plans
Congressional Budget Office Director Douglas Elmendorf testifies during a hearing before the Joint Deficit Reduction Committee, also known as the super committee, Sept. 13, 2011 on Capitol Hill in Washington, D.C.
Steve Chiotakis: The nation's economy grew at an annual rate of 2.5 percent in the third quarter. Today's initial GDP report will quiet fears of a recession for now, but it's still way below the growth needed to reduce unemployment. The government, by the way, also reported slightly
fewer people filed for unemployment benefits last week.
The congressional super committee working out a debt reduction plan by just before Thanksgiving appears to be stuck, with dueling plans released yesterday from Democrats and Republicans. We see it won't be an easy task for some sort of agreement. So what happens next?
Here's Marketplace's Nancy Marshall-Genzer.
Nancy Marshall-Genzer: There are rumblings from credit rating agencies that the U.S. could be downgraded again if the super committee can't reach a deficit-cutting deal, because the automatic cuts that would be triggered wouldn't take effect until 2013 -- after the next elections.
The new members of Congress could try to prevent the cuts. But a managing director at S&P told Bloomberg any watering down of the deficit cutting could cause a downgrade.
Len Blum is managing partner at Westwood Capital. He says another downgrade is quite possible, but not the end of the world.
Len Blum: Long-term I don't know if it matters. You can see from the last downgrade, the Treasury is still able to sell their debt, interest rates are still low. What really matters right now is we focus on getting people back to work.
But don't look to the government to help with that. The deficit cutting means more government workers, and contractors, could lose their jobs.
In Washington, I'm Nancy Marshall-Genzer for Marketplace.