News / Economy

White House: Consumer Spending Will Decline Unless Congress Averts Fiscal Cliff

White House: Consumer Spending Will Decline Unless Congress Averts Fiscal Cliffi
|| 0:00:00
X
November 27, 2012 12:48 AM
It was a blockbuster weekend for retailers, as Americans took advantage of big discounts to ring in the holiday shopping season. But you wouldn't know it from the reaction on Wall Street. Financial markets were sharply lower Monday after White House economists warned that consumers could put the brakes on spending if Congress allows the country to fall off a so-called "fiscal cliff." Mil Arcega reports.
It was a blockbuster weekend for retailers, as Americans took advantage of big discounts to ring in the holiday shopping season.  But you wouldn't know it from the reaction on Wall Street.  Financial markets were sharply lower Monday after White House economists warned that consumers could put the brakes on spending if Congress allows the country to fall off a so-called "fiscal cliff." 

A new poll shows a whopping 247 million shoppers visited stores and websites over the Thanksgiving weekend.

Black Friday - the unofficial start to the holiday shopping season - easily exceeded expectations, living up to its name as the day retailers finally get out of the red and start making a profit.

The National Retail Federation says holiday shoppers spent about $423 per person, pushing the haul for the 4-day shopping weekend to nearly $60 billion - up nearly 13 percent for the same time last year.

Retail analyst Marshal Cohen calls it a good start.

"Black Friday ,good or bad, isn't the indication of how retail will fare for the whole year, but it is a good sign that the consumer has shown up," said Cohen.  

Consumer spending is critical to the U.S. economy, accounting for about 70 percent of total economic activity.

But Monday, the White House warned that failure by Congress to reach a budget deal by the end of the year could put a serious crimp on consumer spending.  

Key indexes on the New York Stock Exchange fell sharply.

Ryan Alexander at Taxpayers for Common Sense explains. "The markets are jittery because they don't see a way forward.  The economy is fragile because we're still in a recovery period and it's time for the President and the speaker and all of Congress to kind of step up, make some difficult choices and step back from the cliff," said Alexander.

Without a deal, the non-partisan Congressional Budget Office says the combination of automatic year-end tax increases and spending cuts which constitute the fiscal cliff - could nudge the U.S. economy back into recession.

Budget expert and former Republican Congressman Bill Frenzel says time is running out.

"The president's going to have to give a little, the Senate's going to have to give a little, the House is going to have to give a little bit more.  And I believe that because the consequences are so bad, they are going to come to agreement," said Franzel.

The White House says failure by Congress to reach a budget deal could reduce consumer spending by nearly $200 billion next year and cut economic growth by 1.5 percent.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.