Will Congress soon decide on a budget plan?
Congress is likely to push back any firm decision on deficit reduction for another few months.
Jeremy Hobson: Lawmakers in Washington are on track to pass a $1 trillion spending bill this afternoon to avoid a government shutdown at midnight tonight. That's likely to clear the way for a short-term extension of the payroll tax cut.
For more on all of this, let's bring in Chris Low, chief economist at FTN Financial. He's with us live from New York as he is every Friday. Good morning, Chris.
Chris Low: Good morning.
Hobson: So with this big threat that was looming of another government shutdown -- I think this is the 487th government shutdown threat this year -- did economists like you pay attention, or did you just look at it and say: They'll figure it out.
Low: We looked at it and said they'll figure it out. And you know, even know they had these sort of intractable things they were not going to give up on -- they did. They blinked. And I think the bottom line is, they realized the voters aren't even going to bother to sort out whose fault it is. If they shut down the government, they're all going to suffer for it.
Hobson: And when it comes to the payroll tax cut, it looks like we may well get a couple of month extension of the payroll tax cut. This was a big controversial issue. But it does look like what will end up happening is, instead of taxing millionaires -- or whatever -- they're just going to probably add to the deficit, right?
Low: Yeah. They probably are. And while it is disappointing, as an economist, I hate to say it, but it's probably the right thing to do. The economy is still super weak; it doesn't make a whole lot of sense to tackle the deficit now. And besides, we still have these historically very, very low interest rates.
Hobson: Chris Low, chief economist at FTN Financial, thanks as always.
Low: Thank you.